The Conundrum of Government

Welcome to This Week’s Leyendecker View

Many of life’s failures are people who didn’t realize how close they were to success when they gave up.
– Thomas Edison

THINKING OUT LOUD

The Conundrum of Government

There are big differences between the public sector and the private sector, and it’s worth pondering their differences. Especially in an election year. That should be obvious but it seems few people think or talk about these differences.

Mostly people are too busy trying to live their normal lives—paying for rent or a mortgage, acquiring things that make them comfortable, raising children and managing family, maintaining their “stuff,” working to get promoted in order to increase one’s economic circumstances, planning and going on vacation, and enjoying hobbies.

When do people really have time to reflect on government? Given this a presidential election year, it might be worthwhile for us to ponder on one of the differences between the public and private sector—how human ambition plays out in each.

Most everyone has ambition. We all want to improve our lives. We all want to grow our economic well being. We all want to be considered successful. We all want some people out there who look up to us.

Through both failures and successes, we see the drama of ambition play out in the private sector all the time. The market is the ultimate scorecard: It rewards successes economically and can allow failures to be concealed for only so long. But failure often feeds a person’s desire to succeed all the more. Henry Ford, Thomas Edison and many more experienced the integral role that failure plays in market success.

How does ambition play out in the public sector, in government?

In contrast with the private sector, economic performance is not the scorecard in government. Instead, the scorecard is political performance, one’s ability to navigate the infrastructure of power, not economy.

The market economy incentivizes and rewards increases in productivity, which generally increases profit. But in the public sector, success is determined by one’s ability to manipulate the system to assert power.

The easiest way for those in government to find success is to expand their power. They can do this by “finding problems” that need to be solved. In government, the more problems one finds in need of solving, the more budget and staff one can justify. The bigger the budget, the bigger the staff, the bigger the government agency, the more power one has and the more successful one is considered. Government’s natural ambition is to beget more government.

There is an obvious clue as to when the government has grown too powerful and influential. It’s when citizens lose confidence in the government. Polls tell us that a growing number of US citizens distrust our government.

The founders of the United States set up a system they hoped would preclude the government from over-involving itself in the private sector. These founders possessed first-hand experience of the government’s natural instinct to grow power and control. We have lived under the ideas of these wise leaders for 250ish years. But as Benjamin Franklin suggested, the founders gave us “a republic, if we can keep it.”

Maybe it’s time we all spent a bit more effort stepping away from our many distractions and the barrage of “information” that politicians and the media (itself with its own biases) throw at us. And instead look for the clues as to how productive our government is, and what it means to our own economic well being as well as to the future of our progeny.

THE ECONOMIC VIEW

The world must be in fragile shape.
Gold hits a record high
And crypto powers ahead
Yet US hiring keeps booming

Prices keep falling in China.
Will China dump goods in the global market?
Is China a risk to the global economy?
French car-parts maker to cut 10,000 jobs

Skyrocketing costs threaten restaurants
If recession comes, could this industry implode?

THE INFLATION BOGEYMAN

The fruit inflation forgot
All hail the king, bananas!

The price of chocolate has gone up
And it’s set to keep rising

Food inflation has been hot
So consumers are DIY-ing it more

THE LABOR VIEW

Union leaders make their case.
Capital has dominated the rewards

The union movement hits college basketball
Are players key to generating revenue?

The robots are coming.
And that’s a good thing

Return-to-work policies
Are creating company culture problems

MEANWHILE IN EUROPE

A UK election is forthcoming.
So, naturally, majority leaders cut taxes

France makes abortion a constitutional right
Wasn’t France a Catholic country?

European stock markets are in crisis
Maybe they’re too focused on climate change.

THE GLOBAL GAME

Has Biden’s Venezuela buddy, Maduro
Played him for a stooge?

Are rich countries addicted to migrant labor?
What are the longer-term consequences?

Turkish stocks soar.
As savers look for an inflation hedge

Cuba begs UN for food
The country is in crisis.

THE UKRAINE FIRE

Ukraine needs more money.
So they turn to crowdfunding

Ukraine is taking it to the Russians.
In Africa?

Russia loads up on European weapons
Sanctions are full of leaks.
There’s a secret oil trading group
That’s helping finance Russia’s war.

THE GAZA FIRE

Everyone was hopeful about Gaza-Cairo talks.
Then Hamas leaves the room

Three die in Houthi missile attack
The slippery slope of war.

UK ship sinks in the Red Sea
Can the Houthis bring down the internet?
Social media sites were out for a while
War has consequences.

THE NEW COLD WAR

China questions US as a world power
Maybe they should question themselves.
They should read this WSJ op-ed

The US and China collaborate.
On emerging-market debt problems
China authorizes more US flights

Russia and North Korea get cozier
New ferry, rail and car routes proposed.

FINANCE

500+ banks will fail or be consolidated
Predicts top real estate CEO.
Did NYCB find a savior?

The casino crowd is back in the stock market
Betting or investing, what is it?
Stock market investors are euphoric
Is this a red flag?

Does private credit game portfolio valuations?
Critics suggest as much.

Are those green shoots on Wall Street?
Banks sure hope so.

REAL ESTATE

Chicago mayor has office building solution
We all wish him good luck!

WFH white-collar workers
Are moving farther away from their jobs

Is global real estate stress
Creating global systemic risk?

TECHNOLOGY

Is Google a has-been?
They seriously botched their big AI launch
What’s going on over there?
Now there’s a new kid on the block
And what about Apple?
Has it reached peak relevance?

Big tech has been self-regulating.
That era may be over
Are big fines becoming more frequent?

AMD wants to sell an AI chip to China
No no no, says Washington.

THE CHAT ON AI

One man turned his story into a comic book
With several generative AI apps.

AI could help rebuild the middle class
Or is it set to doom humanity?

What’s Elon Musk’s OpenAI lawsuit about?
Potential Microsoft global domination?

OUR GOOD FRIEND, FAILURE

Oregon decriminalized drugs in 2020.
After massive drug problems, it’s back-tracking

They were gonna change the world.
Were AVs an impossible idea?

Bitcoin and crypto are back
But for how long?

Nikki Haley gave it a good effort
But she faced a legend in the making.

THE NEXT NORMAL

Media companies cut thousands of jobs
The ad revenue model is broken.

Live-stream shopping is coming
Traditional retail, watch out.

Is Netflix set to dominate TV land?
They are certainly on the offensive.

THE WAR ON CARBON

SEC adopts new carbon rules?
Regulation is almost always inflationary.

The EU enacted a carbon border tax.
It’s struggling at the starting gates

Oilfield technology expands exponentially
Increasing the productivity of each capex dollar.
OPEC extends production cuts
The world is awash in oil and gas.

THE ENERGY TRANSITION

Old wind turbines are an environmental problem.
So turbine makers consider new materials

Amazon goes nuclear
With a long-term power contract.

California offshore wind goals unobtainable
Maybe residents want enormous electric bills.

THE EV DREAM

Ecoterrorists damage German Tesla factory
Ecoterrorists are against EVs?

BYD is far ahead of Western automakers
How can they ever catch up?

Chinese EVs lead the world
What’s the West gonna do about it?
Chinese EVs represent big risk
Stellantis CEO worries out loud.
Tesla’s China market weakens

THE CHINA SYNDROME

Chinese trade rebounds.
On electronics exports and Russia trade
They dominate the solar panel world
As they seek to banish US tech from China

China sets 5% GDP growth target
How will they achieve that?
Unfortunately, we can’t trust their numbers

Goldman’s wealth management chief investment officer
Says don’t invest in China

THE WASHING-TONE

Georgia not happy with Biden subsidies
They’re hurting Georgia’s economy.

German companies flock to the US.
Growing economy and Biden’s incentives

THE ELECTION DISTRACTION

Biden campaigns on raising taxes
Does that sound counter intuitive?
Gallup shows Biden’s got uphill climb on economy

Trump pitches reciprocal trade act.
Tit-for-tat on tariffs on US goods

Argentina’s Milei embraces Trump
Are the old, established order’s days numbered?

MAKING A BETTER YOU

One small habit change
Can have a material effect on your life.

How happy couples argue
They control themselves, not the other.

We can all find meaning
By embracing the mundane

HOW ABOUT A BREAK

Who has a snake festival?
Well Italy, of course!

Japan’s 1,000-year-old naked man festival
Has a demography problem
Can jet suit races replace it?
Go, Iron Man, go!

Folklore is philosophy
It helps us understand values and views.

SONG OF THE WEEK

“Go Dig My Grave”
Lankum channels Gaelic music.
Lyrics can be poetry, ya know.

CASTING AROUND THE PODS

The body through the ages
How our bodies adapt to technology.

VIDEOS OF THE WEEK

The art of herding sheep with a dog
Is pure beauty.

Great art explained: “The Birth of Venus”
Did it change cultural perspectives forever?

The Spaceman trailer.
Adam Sandler does sci-fi drama???

FROM THE HEADHUNTER’S KITCHEN

Who is up for some meatballs?

Italian meatballs
Turkey meatballs
French onion chicken meatballs
Teriyaki meatballs
Swedish meatballs
Cocktail meatballs
Thai meatballs
Pork and shrimp meatballs
Veal meatballs
Polish meatballs
And on and on and on and…

The origin of spaghetti and meatballs

THE RANDOMS

Is AI about to knock the feet out from under our technology juggernauts and launch a new era of leading companies?

Legacy institutions almost always benefit from incremental change. But step-change tends to put them at risk. Once you’re an institution, it is hard to be nimble.

Some people are probably asking themselves how it’s possible that, in 2024, there is still war. This question can probably be answered by another question: After 3,000 years, are the Ten Commandments still relevant?

Don’t you love watching those entertainment and sports awards shows where the influencer elites applaud themselves? Has hero worship gotten to an extreme?

Who remembers when soldiers were heroes?

Who remembers when mothers were heroes?

Who remembers when politicians were heroes? Don’t laugh, our founding fathers were.

Does the working class’s support of Donald Trump tell us they are a bunch of rubes? Or does it tell us the political and business elites of this country are out of touch? Or have Chinese, Russian, Iranian and/or North Korean disinformation campaigns on US social media shaped our political discourse?

Therapists report a rising incidence of high levels of mental stress over climate change. Are people stressed out because of climate change, or are they stressed out because so many in the media and government constantly tell us we are destroying the earth? Surely it’s the fault of the greedy and evil private sector.

I wonder if Biden’s infrastructure and IRA bills are propping up the labor market and economy in general. And, if so, when will those lifelines run out?

Do the average American’s values match up with billionaires’ values?

IN CASE YOU MISSED IT

Picking Teams in the Schoolyard
March 1, 2024

Guilty as Charged!
February 23, 2024