Frequent Fliers, Please Report to the Counter

One acid test of the sincerity of those who want to seriously reduce carbon emissions to arrest climate change is whether they will support reasonable-cost nuclear power. The rapid onset of new atomic plants would be one way actually to come close to net-zero in emissions without drastically changing first-world lifestyles. The alternative acid test is whether these climate advocates will honestly address how those lifestyles would need to change absent a nuclear fallback. This New York Times article, buried in the Oct. 8 print edition, caught my eye because it hints at how much and whose flying would need to be curbed to meet international aviation targets now set for 2050. The key passage: “The richest 20% of people worldwide take 80% of the flights….The top 2% of frequent fliers take about 40% of the flights.” You’re going to have to stop those folks from doing so (either commercially or on private jets) if you’re serious about “equity” and about keeping fossil-fuel aircraft within these tight limits. This stands to be an interesting test for the economy, for democracy and (not least) for compliance. Europe is leading so far on this aviation campaign but the U.S. is now committed as well. After we get the skies worked out, we can tackle cruise ships and yachts.

Consultants Fuel Costs of the College Cream

If one strained to find a core example of what has driven the widely-lamented rise in premium enrollment costs at America’s prestige universities, there’d be no better source than the rising-revenues chart of this Economist article on the big 3 U.S. management consultancies. This three-cylinder engine generated better than 10-fold nominal growth in the decades from 1990 to 2020, and if anything the rate of increase quickened in the last five of those years. Those billions of bucks, in turn, led to the recruitment of thousands of consultants fresh with degrees from these very universities. Of course, the trio of McKinsey, BCG and Bain are far from the only lucrative salary and bonus draws on elite American graduates–Wall Street and Big Tech are famously hungry for smarts and pedigree as well–but they are symptomatic of a rich-and-richer strain in the economy. The consultancies are getting more frequent scrutiny of their practices, which prompts the (also elite) Economist’s nonetheless sympathetic accounting. These “practices” offer high-priced hand-holding to executives of the world’s biggest outfits, and arguably more: Operating conditions are changing faster than internal managements can handle, the story goes. Distilled intelligence is thus vital. A friend who works at the Big 3 and can laugh at their efforts to demark supposedly novel concepts in charts and lexicon, nevertheless argues that the pandemic shocks really did call for outside help. Maybe, but 2020 was only the last year of this steep fee incline. Who knows how the industrialists of old adjusted, on their own, to electricity and the light bulb when Harvard produced only gentlemen.

Fed’s Mary Daly Misses a Labor Component in Price Rises

It fell to me to ask the obligatory question about the strong dollar at this appearance of San Francisco Federal Reserve president Mary C. Daly at the Council on Foreign Relations today, and she gave the obligatory response that the currency’s forex value is not one of the Fed’s mandates. She elaborated a bit in the quotation in this Reuters account. {A previous version of this item said she is a Fed governor–she currently is not on its policy-making committee, as she was in 2021; Fed regional bank presidents rotate out of those voting slots.]

Of more substance, if not news value, was her discussion as a labor economist of the reasons the Fed, among other Washington policymakers, miscalculated the onset of persistent inflation coming out of the pandemic. She cited a couple of factors: an inability to foresee the sluggishness of supply forces, both in the U.S. and internationally, in pulling out of the Covid-19 disruption; and an underestimation of how strong demand would be, especially for goods, as Americans began to stir again. She made no mention of the role that fiscal subsidies–some of which continue under “emergency” edicts–played in discouraging labor-force participation. The drawdown of that labor force was something Daly nonetheless cited as a “worrisome” damper on future economic health–she even made a joking reference to a “quit to find myself” mentality among some who left jobs. Might the fact that so many bills were deferred or diminished have something to do with that?

If Only Your 401(k) Was in the NFL

Trillions of dollars of nominal global wealth have been wiped out in the current bear market for stocks and bonds. But, as this Bloomberg item notes, there’s at least one major exception to the asset-price declines: pro sports franchises. For reasons Gerry Smith describes here–and others such as Mike Ozanian and his crew at Forbes have long chronicled–the valuations of even poorly performing (and managed) clubs continue to escalate. In an age when inequalities are immediately suspect, this ought to raise hackles, because owning a team is definitely a rich guy thing. Yet as many (including myself) have been noting for years, municipal and state governments often fall over themselves to extend more inducements (subsidies) to these same sports barons to locate their wares in those sponsoring jurisdictions. At its root, this is a bread-and-circuses syndrome very much implicating the local populations but also the chorus of marketers (including supposedly neutral news media) that lend themselves to the endless promotion. Maybe, as redistribution (not to mention reparations) becomes an everyday talking point among the political class, a certain sector of rank and privilege might attract attention that, for once, it doesn’t seek.

Price of Practicing Journalism Is a Narrow ‘Social’ Window

Yesterday (9/8/22) I attended a panel discussion at the International Press Institute’s “World Congress” on the escalating dangers to journalists, including social-media assaults. The group at Columbia University included Washington Post editor Sally Buzbee and others from international publications, and none was too sure how to combat what all agreed were increasingly organized attempts to intimidate a free press. Newsrooms have long had to handle potentially-violent cranks–one reason most stopped allowing easy public access–but today’s online threats and various personal invasions, including doxxing, have taken on a more sinister cast. They especially seem targeted at women. It’s apparent that social media is a particular vulnerability, and yet, as this summer article from the UK’s Media Gazette explores, those platforms also are thought a necessary way of reaching and expanding audiences. The New York panel could only conclude that enhanced training of staff (freelancers, too?) to avoid undue exposure, and bullet-proofing of coverage against bogus claims of “fake news,” are the most ready remedies. Surely anyone entering hard-news reporting or commentary needs to reconsider any past or present appearances online and limit them to what is their public, professional face. This is a sacrifice, if you can call it that, as basic as not receiving gratuities through their work–part of the calling of journalism.

A Yen to Visit Japan? But Wait

Tourism has taken off again in Southeast Asia, post-pandemic, offering economic relief in particular to Thailand. But it remains stricken in nervous Japan, where Covid rates have recently spiked. Japan has bumped up the total admissions to 50,000 daily and broadened the entry beyond tour groups, but is still requiring individual visas from the U.S. and other countries where it previously waived the requirement. This is an especially vexing policy when the yen has fallen to a 24-year low against the American dollar, providing an opportunity to visit a normally very costly destination at reasonable expense. (That’s largely because Tokyo’s central bank is keeping interest rates low when other countries are tightening to contain inflation.) Always venturesome Australians are also frustrated by the travel limits, as this report from their major broadcaster suggests. The quirky Japanese attitude toward foreign blights has long been a characteristic (a charm?), leading to a bizarre hosting of the Olympics last year, and overall wealth leaves the nation able to remain stand-offish, even at great cost to some industries. At least the domestic population is not subject to tyrannical lockdowns, as in China.

Maybe the NY Times Is Enough for Its Ilk

The New York Times must be self-conscious about covering, as it does in this piece today, the seeming troubles of the Washington Post. That’s because the two media giants are essentially selling a similar product–international news and opinion aimed at an established if left-of-center audience. Thus they are direct rivals. This article’s target is Fred Ryan, whom owner Jeff Bezos put in charge of the Post, with the suggestion that his short-sightedness is partly responsible for the company’s drift since 2020 into loss-making. (The Times frequently boasts of its own robust results.) No doubt there are many causes of whatever ails the Post, but unmentioned here is the likelihood that the target audience has grown more reluctant to spend as much time, and money, on media that aren’t fundamentally painting a different picture. Since 2020, many a Post subscriber may have decided that the Times (which of course has a big Washington bureau and national political staff) will suit them well enough. Whereas the Wall Street Journal, which is still growing, offers a distinct focus on business and a right-of-center commentary section, the Post is just second fiddle. A version of this challenge is faced by other ambitious “newspapers” such as the Los Angeles Times–if the New York Times with its sweeping geographic reach can offer coverage and punditry that satisfies the regionalist in you, why add another course that tastes much the same?

Climate Push Has But Marginal Utility for Economics

Another Zeitgeist piece from the New York Times today denigrates traditional economics, which is to say the price mechanism for allocating resources. This time, it’s about climate and carbon, and the target of sorts is Nobel laureate William Nordhaus, long a favorite among left-of-center economists. Nordhaus, you see, early on proposed a carbon tax to discourage use of fossil fuels. That’s still the method most favored by market-oriented advocates of a greenhouse-gas policy, though it hasn’t mustered a political majority in the U.S. because it would make the middle class (and everybody else) pay more for gasoline and energy-based products. But now activists on the climate front have dismissed such an approach as merely fiddling at the edges when emergency measures are necessary. Grants and loans for alternative energy were instead the thrust of the big Biden-Manchin compromise spending package just passed. And it sounds like more regulatory measures are just around the corner. Heather Boushey, a redistributionist who has the climate file on the White House Council of Economic Advisers, “says the field is learning that simply tinkering with prices won’t be enough as the climate nears catastrophic tipping points,” the Times reports. “So much of economics is about marginal changes,” she is quoted directly. “With climate, that no longer makes sense, because you have these systemic risks.” Sorry, Dr. Nordhaus and all you other dismal (and “marginal”) scientists, Washington has serious work to do.

Money Master of the Virtues, RIP

John Train was known to his largest audience through years of writing on investing and investors, most notably in his 1980 book, “The Money Masters.” But as anyone at closer range to John soon appreciated, it was Mammon who served this man’s insatiable curiosity. On subjects far and wide, he was interested and interesting, a fount of learned annotations delivered lightly. His well-lived life ended this month at his summer home in Maine at age 94.

It was there in the year 2000 that I visited him for a Forbes Magazine article on his new Civil Courage Prize. It annually and internationally honors, as he put it, “steadfast resistance to evil at great personal risk.” The accolade since has reached into many corners of the world, as John’s travels and certainly his knowledge did. My trip back then combined, as John so often did, the consequential with the playful. While skippering me around his nearby waters on break, the septuagenarian drew a scold from the harbormaster for his illicit speed.

I had edited John’s submissions at the Wall Street Journal in the 1980s–not there writing on equities but on his ranging topical inquiries. These preceded digital search, but one I recall was an inside account–told from an everyman’s vantage–of one of the aircraft carriers that was part of the Reagan buildup. John’s interest in military affairs was reflected in his multiyear sponsorship of a yearly appearance by the U.S. service chiefs at the Council on Foreign Relations in New York.

John had conservative political instincts but liked to follow many an investigative trail (the Italian Mafia was a longtime interest) and to hear a range of views. These were voiced in symposia he’d host at his Manhattan townhouse or at a floating dinner salon he developed out of a consortium of wine-investing pals. The price of admission was to try to feed John with new information.

He never lost his touch for the markets–investment counseling was his vocation. Sometimes he gave away good advice. Over a meal soon after the dot-com crash, with my portfolio bruised, I asked for a few studier stocks. One he suggested was Automatic Data Processing, an unsexy listing with a steady dividend. It’s risen many fold and is my second-largest holding.

John also favored his friends at the holidays with his latest booklet of sayings, snippets or historical artifacts. One I’ve kept handy is “Rules of Engagement In War and Life.” Mao and Churchill are in there, Talleyrand and Satchell Paige. But also, in this one, are plenty of thoughts from “–J.T.” The first is an introductory caution: “Things change, so many of these notions are contradictory: life is like that.” This product of Groton and Harvard had seen much since those earliest days at the Paris Review in 1953.

This entry epitomizes the author–I can hear him saying it: “Don’t give quick answers to hard questions. ‘La nuit porte conseil,’ say the French: Contemplate a situation overnight.”

John’s ready erudition might have have been overbearing were it not for the frequent accompanying twinkle. “The greatest of the gift of the gods is a cheerful temperament,” read a J.T. Rule of Engagement. So true. And this: “Aging, keep active.” A good man of his word he was.

Aug. 24, 2022 (Photo from Forbes, by David McLain/Aurora)

Across the Peconic, It’s Not Just a Wine Story

Most of my reporting on the recent history of land preservation on the East End of Long Island has dealt with the South Fork, or “The Hamptons.” But on the other side of Peconic Bay, similar if somewhat later stories could be told. This item from Patch spotlights one man’s efforts in New Suffolk that began in 1982, when just as on the waterfront to the south, condominium and commercial development loomed. Although the North Fork today is experiencing a crush of popularity and glamorous winery investment that disturbs some locals, its hamlets could never have sustained their mostly bucolic character without activists such as Joe McKay. Except for the town of Riverhead, which has plunged ahead with buildout of its western corridor, most localities on both forks of the East End have grown protective of their past–under constant pressure from green lobbies, if not their own citizenry.

North Fork Waterfront Preservation ‘Pioneer’ Feted | North Fork, NY Patch