After all the talk of abortion rights, protecting democracy, and how "fun" Vice President Kamala Harris apparently is, the first night of the Democratic National Convention culminated with a celebration of President Joe Biden's four years in office.

Biden "recovered all those millions of jobs that [Donald] Trump watched slip away," Sen. Dick Durbin (D–Ill.) declared. Biden "rebuilt the economy" after the pandemic put it "flat on its back," intoned Sen. Chris Coons (D–Conn.), a longtime Biden stan. 

Biden himself put the cherry on top. "We've had one of the most extraordinary four years of progress ever," the president said. "We gone from economic crisis to the strongest economy in the entire world," he claimed, pointing to job creation figures, economic growth, higher wages, and "inflation down, way down, and continuing to go down."

If so, someone should probably tell Vice President Kamala Harris about all that.

Just four days ago, Harris outlined plans for gigantic government interventions in the economy, including price controls. In what was billed as the first major policy speech of her hastily assembled campaign, Harris promised to implement the "first-ever federal ban on price gouging on food and groceries" and to take other actions to empower the federal government to "bring down costs." (There's been some debate in the days since her speech about whether it is fair to say Harris has called for price controls, but economist Brian Albretch has laid out clearly why she in fact did, writing that "any policy that gives the government the power to decide what price increases are 'fair' or 'unfair' is effectively a price control system. It doesn't matter if you call it 'anti-gouging,' 'fair pricing,' or 'consumer protection'—the effect is the same. When bureaucrats, not markets, determine acceptable prices, we're dealing with price controls.")

There has been a lot written already about why price controls are a terrible idea, and more will be written in the days ahead. For now, let's take a moment to appreciate the head-spinning logic that Biden and Harris are asking voters to accept: that America's economy is stronger than ever—but is also in need of radical government action to substitute the wisdom of bureaucrats for the market's power to determine prices.

Price controls are not a policy people reach for when things are going great. Governors don't go around threatening businesses with prosecution for price gouging when there's not a hurricane or other natural disaster happening. The Soviet Union didn't implement price controls because everyone was wealthy and well-fed. Neither did Venezuela.

But that's what Harris doing. On Friday, she promised "harsh penalties" on businesses that engage in whatever she (or her administration) determines to be "price gouging" or the collection of "excessive" profits—even though her campaign has yet to explain how she would determine those things.

Harris' promise to combat high grocery prices was made just hours after the White House Chief Economic Advisor Jared Bernstein was standing in front of reporters and touting how low grocery price inflation has been: "This morning, it was about 1 percent year over year," he said at a press briefing on Wednesday. "And there are a number of items within there where we actually have deflation, falling prices of some groceries."

Did someone tell Harris?

In part, this confusion probably stems from the unusual situation that Harris' campaign finds itself. She is, for all intents and purposes, the incumbent candidate in the race, despite not being the sitting president. And she's running against another quasi-incumbent in former President Donald Trump. Typically, incumbents try to push the message that everything is going well, or at least getting better, while challengers say everything sucks and promise to make it better.

With voters discontented with the state of the economy, both Trump and Harris are trying to distance themselves from the mess they each had a hand in creating. But Democrats can't go all-in on "everything sucks" for the obvious reason that Biden, the actual incumbent, is a Democrat.

The actual economic signals are a mixed bag right now. Unemployment has ticked up, raising fears of a possible recession on the horizon. High interest rates have replaced high inflation, which means many Americans are still feeling a squeeze on their personal finances. Biden doesn't deserve the applause he's getting, but there's also not a crisis that would demand the sort of radical actions Harris is proposing, even if the actions she's proposing really worked.

And of course, those high prices are largely the fault of government overspending (backed by heavy borrowing) during and after the pandemic. If Harris wants to put controls on something that would actually provide relief to Americans, she should aim to restrict government borrowing rather than grocery store prices.

Instead, it looks like Democrats have settled on the idea that Biden saved the economy and now Harris is here to clean up the mess—and they're just hoping no one thinks too hard about it.

By the way, you don't have to break your brain trying to make sense of this. It's far easier simply to remember that presidents don't run the economy and shouldn't get credit and/or blame for every single economic indicator. (Though they can certainly influence events, as we'll see if Harris gets her way and implements some form of federal price controls.)

But if nothing else, this Democratic cognitive dissonance creates a fun game for the next three nights of the convention: Will the speakers keep telling us that America's economy is stronger than ever, or that the country is in a crisis and Harris needs to be our price-setter-in-chief?

The post If Joe Biden Saved the Economy, Why Do We Need Kamala Harris' Price Controls? appeared first on Reason.com.

It's OK to calm down about the economy. Yes, Friday's unemployment news was bad. Yes, the NASDAQ and Dow Jones neared correction territory on Friday morning. And yes, the Sahm Rule Recession Indicator has now been triggered. Odds are, though, a recession is not imminent. 

Here are three reasons why, in descending order of optimism. One, recent growth has been strong. Two, the economy has been near full employment for a while, and some kind of job growth slowdown is almost inevitable. Three, we're past the window where Federal Reserve actions can influence the election, though its recent behavior is still worrying.

Last week, the media's manic mood swing was on the exuberant side from news of a strong 2.8 percent gross domestic product (GDP) growth in the second quarter of 2024, which ended on June 30. This was a surprise improvement on the previous quarter's 1.4 percent growth. A normal reading is around 2 percent. Better, most of that growth was in the private sector, especially in consumer spending and inventory investment.

The current quarter's GDP growth estimate will come out on October 30. It would take a drastic swing to move from 2.8 percent to negative in just one quarter, though it has happened before. It typically takes two consecutive quarters of negative growth for the National Bureau of Economic Research to declare a recession, though its official standard is to call it as they see it.

The unemployment rate went up from 4.1 percent in June to 4.3 percent in July. June's reading snapped a 30-month streak of unemployment at or under 4 percent. This was the longest such streak since the 1960s.

For context, anything under 5 percent is considered pretty good. The eurozone's unemployment rate is currently 6 percent and often tops 10 percent, even in good times.

When an economy is essentially at full employment, a slowdown in job growth isn't necessarily cause for worry. The economy still has 8 million job openings, and the labor force still grew by 114,000 jobs. That annualizes to more than a million more jobs per year. 

That is slower than population growth, which isn't ideal. The labor force participation rate is also still below prepandemic levels. But a sane immigration policy combined with labor reforms like loosening occupational licensing requirements would fill more of those job openings while creating more opportunities for workers who are still outside the labor force.

The Federal Reserve's recent actions spark some worry. The Fed has spent the last two-and-a-half years walking back its panicked overreaction to COVID-19, which caused high inflation in the first place, along with a bipartisan deficit spending explosion. Inflation is finally slowing and getting back close to its 2 percent target, down from its 9.2 percent peak.

The trouble is that Fed Chairman Jerome Powell indicated that the Fed will stop focusing solely on inflation and will now pay attention to the labor market as well. The Fed has a dual mandate that tasks it with both keeping inflation low and keeping employment high. These can contradict each other, as Powell might soon find out.

If unemployment continues to worsen, look for the Fed to counteract that with stimulus in the form of interest rate cuts and monetary expansion. The tradeoff to this stimulus is higher inflation—exactly what the Fed has been fighting.

While an expected interest rate cut in September isn't a big deal by itself, if it's the start of a larger stimulus campaign, any short-term economic boost will come at the cost of a slowdown later.

The Fed's actions have lag times ranging from about six months to 18 months, so anything it does now will not impact the election. This is good news for the Fed's independence, but it does not inspire faith in Powell's commitment to fighting inflation. It would be better for the Fed to stay focused on inflation. Monetary policy is a poor tool for job creation. Entrepreneurs have a much better track record.

As usual, the big picture is a mix of short-term pessimism and long-term optimism. Whether or not the current recession doommongering comes true, the long-term trend of increasing superabundance will hold. That's as good a reason for calm as any.

The post Recession Is Not Inevitable, Despite Stock Market Slump appeared first on Reason.com.

Republican vice presidential nominee J.D. Vance has been in the news for an old clip of him talking about how the tax code should punish adults without kids. While Vance's proposal probably aims to address demographic concerns, it represents a misguided approach that contradicts fundamental principles of economic freedom and fairness.

And you know what? That's precisely what our tax code already does, in this case and many others.

Using the tax code to "reward" parents and "punish" nonparents is at odds with the idea of a neutral, efficient tax system. In an ideal and fair world, the tax base would be broad but taxed at a low rate. People making the same income should be paying the same level of taxes no matter how they choose to live their lives.

Unfortunately, the tax code is neither fair nor neutral. It punishes and rewards all sorts of behaviors based on what government officials decide is good or bad.

For instance, the tax code does, in fact, treat people with kids more favorably than it treats those who do not have kids.* There's the child tax credit, of course. Then there's the earned income tax credit, which is more generous for families with children than those without. And there is no shortage of other provisions, such as a very significant deduction for heads of households and another for dependent care, which do the same thing.

It's hard to know what Vance's proposal really entails. Does he want another surtax on childless parents? Does he want to expand the child tax credit and make it a universal basic income like many conservatives and progressives want? It's also unclear whether he is simply failing to see that our tax code already delivers on his wishes and punishes childless adults. Either way, I assume he is well intentioned and that he is rightfully concerned about the decline in fertility we are witnessing not just in this country but across the world.

Unfortunately, punishing childless parents with additional taxes wouldn't boost fertility. For one thing, we've had a child tax credit since the 1990s, and the tax break has been regularly extended. That hasn't encouraged people to have more kids.

That's not unique to the child tax credit. Lots of evidence exists showing that government programs of all sorts meant to encourage, reward, or stimulate the supply of babies usually fail. One of the most dramatic examples is South Korea. The country has spent over $200 billion on such policies over the past 16 years, and fertility rates are still falling.

There isn't any doubt that more people, and hence more babies, are a boon for our lives and our economy. But that alone isn't a good reason for government subsidies. And while raising kids is expensive, that's no justification for a government tax break, either.

Besides, careful studies have shown the cost of raising a child in America has been decreasing for six decades. In the end, rather than rewarding families with lesser taxes at the expense of childless adults, I would encourage advocates to focus on removing existing government barriers—like overzealous policies that make child care more expensive without making kids measurably safer—that make life more complicated for families.

Ultimately, these are only secondary aspects of a much bigger debate. Our tax code is incredibly unfair. It's not just childless adults that face a surcharge compared to parents. Tax breaks for homeowners mean that renters pay more money for the same amount of housing. Households which include a college student pay less in taxes. People who can afford an electric vehicle can secure a tax break that others cannot.

These tax breaks for some are not just unfair to the taxpayers who don't get them—they also turn our tax code into a complicated mess that requires many millions of collective hours to comply with. Instead of adding more complexity and bias, we should be moving in the opposite direction—toward a simpler, flatter, and more neutral code that treats all taxpayers equally.

Using the tax code as a tool for social engineering is misguided. It leads to economic inefficiencies and infringes on individual liberty. Rather than doubling down on the problematic aspects of our current system, we should be working toward comprehensive reform. Only then can we hope to see taxes as something that truly serves the interests of all Americans, regardless of their personal choices.

COPYRIGHT 2024 CREATORS.COM

*CORRECTION: The original version of this article misstated in part who benefits more from the current tax code.

The post J.D. Vance Wants To Control You With Taxes appeared first on Reason.com.

Robert F. Kennedy Jr. won applause at the Libertarian National Convention by criticizing government lockdowns and deficit spending, and saying America shouldn't police the world.

It made me want to interview him. This month, I did.

He said intelligent things about America's growing debt:

"President Trump said that he was going to balance the budget and instead he (increased the debt more) than every president in United States history—$8 trillion. President Biden is on track now to beat him."

It's good to hear a candidate actually talk about our debt.

"When the debt is this large…you have to cut dramatically, and I'm going to do that," he says.

But looking at his campaign promises, I don't see it.

He promises "affordable" housing via a federal program backing 3 percent mortgages.

"Imagine that you had a rich uncle who was willing to cosign your mortgage!" gushes his campaign ad. "I'm going to make Uncle Sam that rich uncle!"

I point out that such giveaways won't reduce our debt.

"That's not a giveaway," Kennedy replies. "Every dollar that I spend as president is going to go toward building our economy."

That's big government nonsense, like his other claim: "Every million dollars we spend on child care creates 22 jobs!"

Give me a break.

When I pressed him about specific cuts, Kennedy says, "I'll cut the military in half…cut it to about $500 billion….We are not the policemen of the world."

"Stop giving any money to Ukraine?" I ask.

"Negotiate a peace," Kennedy replies. "Biden has never talked to Putin about this, and it's criminal."

He never answered whether he'd give money to Ukraine. He did answer about Israel.

"Yes, of course we should,"

"[Since] you don't want to cut this spending, what would you cut?"

"Israel spending is rather minor," he responds. "I'm going to pick the most wasteful programs, put them all in one bill, and send them to Congress with an up and down vote."

Of course, Congress would just vote it down.

Kennedy's proposed cuts would hardly slow down our path to bankruptcy. Especially since he also wants new spending that activists pretend will reduce climate change.

At a concert years ago, he smeared "crisis" skeptics like me, who believe we can adjust to climate change, screaming at the audience, "Next time you see John Stossel and [others]… these flat-earthers, these corporate toadies—lying to you. This is treason, and we need to start treating them now as traitors!"

Now, sitting with him, I ask, "You want to have me executed for treason?"

"That statement," he replies, "it's not a statement that I would make today….Climate is existential. I think it's human-caused climate change. But I don't insist other people believe that. I'm arguing for free markets and then the lowest cost providers should prevail in the marketplace….We should end all subsidies and let the market dictate."

That sounds good: "Let the market dictate."

But wait, Kennedy makes money from solar farms backed by government guaranteed loans. He "leaned on his contacts in the Obama administration to secure a $1.6 billion loan guarantee," wrote The New York Times.

"Why should you get a government subsidy?" I ask.

"If you're creating a new industry," he replies, "you're competing with the Chinese. You want the United States to own pieces of that industry."

I suppose that means his government would subsidize every industry leftists like.

Yet when a wind farm company proposed building one near his family's home, he opposed it.

"Seems hypocritical," I say.

"We're exterminating the right whale in the North Atlantic through these wind farms!" he replies.

I think he was more honest years ago, when he complained that "turbines…would be seen from Cape Cod, Martha's Vineyard… Nantucket….[They] will steal the stars and nighttime views."

Kennedy was once a Democrat, but now Democrats sue to keep him off ballots. Former Clinton Labor Secretary Robert Reich calls him a "dangerous nutcase."

Kennedy complains that Reich won't debate him.

"Nobody will," he says. "They won't have me on any of their networks."

Well, obviously, I will.

I especially wanted to confront him about vaccines.

In a future column, Stossel TV will post more from our hourlong discussion.

COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

The post RFK Jr. Pays Lip Service to the Debt While Pushing Policies That Would Increase It appeared first on Reason.com.

As MMORPG Black Desert Online sneakily celebrates its tenth anniversary, developer Pearl Abyss reveals a brand new playable class coming to the game soon. There's even a new expansion on the horizon, alongside the reveal of the highest-tier weapon in the entire game.

Released this morning: The jobs report, released at 8:30 this morning, shows that in May employers added 272,000 jobs, up from the monthly average of 242,000 that's persisted for the first half of the year and far more than most economists predicted.

In April, the unemployment rate was 3.9 percent—a bit higher than the 3.4 percent unemployment the year prior. In May, it slid up to 4 percent.

"The headline number is a source for celebration for President [Joe] Biden, who frequently points to the strong job market when making the case to voters that he has handled the economy well," summarizes The New York Times. But really, the picture is more complicated.

The economy is finally recovering from its recent high-inflation period, but the recovery has been slower than predicted and the Federal Reserve will probably not be inclined to lower rates anytime soon (which affects people's willingness to transact houses, for example). This new data probably won't change the Federal Reserve's behavior, so interest rates will remain high—a tough pill for Biden to swallow, as that may be one of the major factors leading to people's perception that the economy just isn't working for them.

Maybe Trump isn't so bad? Per The Washington Post, Donald Trump plans "to repeal parts of the 1974 law that restricts the president's authority to spend federal dollars without congressional approval" if he's elected to office a second time. He's claimed his Day 1 in office would include him telling every agency to find a "large chunk" of their budgets that can be cut, taking aim at international aid programs and environmental agencies in particular.

"What the Trump team is saying is alarming, unusual and really beyond the pale of anything we've seen," Eloise Pasachoff, a budget law expert at Georgetown, tells The Washington Post. But the national debt—which currently exceeds $34 trillion—is also alarming, unusual, and really beyond the pale of anything we've ever seen, so it's not clear what types of drastic measures ought to be taken to return spending to appropriate levels. For more on the national debt, check out this Just Asking Questions interview with Rep. Thomas Massie (R–Ky.), who wears a debt clock lapel pin.

But the specific mechanism Trump plans to use may throw the balance between the legislative and executive branches out of whack. "I will use the president's long-recognized Impoundment Power to squeeze the bloated federal bureaucracy for massive savings," writes Trump on his campaign website. Impounding funds, which was banned by lawmakers when President Richard Nixon abused the process, is when a president refuses to dispense funds even after Congress has already appropriated them.

Many quoted by The Washington Post seem to believe this would be a massive constitutional crisis, and there's plenty of reason to be skeptical that Trump would actually cut the amount of spending he says. But it's interesting that Trump gets dinged for proposals like this one, while plenty of Joe Biden's spendiest programs (like student loan forgiveness, which has repeatedly been thwarted by the courts) are deemed totally acceptable.

Scenes from New York: "An investigation from the City's Department of Investigation found that around 1,200 NYPD officers cheated while taking their promotional exam, yet the cheating was apparently for naught, because it didn't meaningfully improve their test scores," reports Hell Gate. 

QUICK HITS

• "SpaceX received the go-ahead from US air safety regulators to launch its massive Starship rocket on a fourth major test flight, as the Elon Musk-led company works to make the vehicle operational and ready for regular trips to space," reports Bloomberg. "The Federal Aviation Administration granted SpaceX a launch license to move forward with the next test flight, the agency said in a statement on Tuesday." (UPDATE: The launch happened yesterday and was successful.)
• Canada's new Online Harms Act would "curtail people's liberty in order to stop future crimes they haven't yet committed," writes The Atlantic's Conor Friedersdorf. Take it from the man himself: "We need the ability to stop an anticipated hate crime from occurring," says Canada's attorney general.
• Hunter Biden's gun trial—where he's charged with lying about drug use to obtain a gun—is ongoing but looking especially messy as his sister-in-law/ex-girlfriend Hallie Biden testifies against him, talking about how she disposed of his gun in a grocery store garbage can.
• "Congestion pricing, a good idea, died because our government doesn't deserve the money," writes Josh Barro at Very Serious.
• "A widely held belief is that the Nordic countries are great bastions of rehabilitation: by focusing on rehabilitation rather than punishment, they have managed to achieve remarkably low recidivism rates. Or so the story goes. This notion, however, is largely a myth," argues Patterns in Humanity.
• Briahna Joy Gray, who hosted Rising with Reason's own Robby Soave (and sometimes yours truly, when I would fill in for Soave), rolled her eyes at a source's account of her sister's October 7 rape and was promptly fired from the show.
• Joe Biden's executive order restricting asylum seekers is already having terrible consequences:

"They aren't all asylum seekers" totally misses the point. We don't want to send one person back to persecution or torture. If that requires letting in 10 or 100 who want to work, so what? My tax dollars shouldn't go to help any persecutors or torturers. https://t.co/hoh2MOyyz4

— David J. Bier (@David_J_Bier) June 6, 2024

• New Just Asking Questions with Mike Solana (an absolute must-follow):

The post The Economy Biden Wants appeared first on Reason.com.

Congressional Budget Office (CBO) projections provide valuable insights into how a big chunk of your income is being spent and reveal the long-term consequences of our government's current fiscal policies—you may endure them, and your children most certainly will. Yet, like most other projections looking into our future, these numbers should be taken with a grain of salt. So should claims that CBO projections validate anyone's fiscal track record.

So much can and likely will happen to make projections moot and our fiscal outlook much grimmer. Unforeseen events, economic changes, and policy decisions render them less accurate over time. The CBO knows this and recently released alternative scenarios based on different sets of assumptions, and it doesn't look good. It remains a wonder that more politicians, now given a more realistic range of possibilities, aren't behaving like it.

First, let's recap what the situation looks like under the usual rosy growth, inflation, and interest rate assumptions. Due to continued overspending, this year's deficit will be at least $1.6 trillion, rising to $2.6 trillion by 2034. Debt held by the public equals roughly 99 percent of our economy—measured by gross domestic product (GDP)—annually, heading to 116 percent in 2034.

The only reason these numbers won't be as high as projected last year is that a few House Republicans fought hard to impose some spending caps during the debt ceiling debate. The long-term outlook is even scarier, with public debt reaching 166 percent of GDP in 30 years and all federal debt reaching 180 percent.

No one should be surprised. To be sure, the COVID-19 pandemic and the Great Recession made things worse, but we've been on this path for decades.

Unfortunately, if any of the assumptions underlying these projections change again, things will get a lot worse. That's where the CBO's alternative paths help. Policymakers and the public can better see the potential risks and opportunities associated with various fiscal policy choices, enabling them to make more informed decisions.

For instance, the CBO highlights that if the labor force grows annually by just 0.1 fewer percentage points than originally projected—even if the unemployment rate stays the same—slower economic growth will lead to a deficit $142 billion larger than baseline projections between 2025 and 2034. A similarly small slowdown in the productivity rate would lead to an added deficit of $304 billion over that period.

Back in 2020, the prevalent theory among those who claimed we shouldn't worry about debt was that interest rates were remarkably low and would stay low forever. As if. These guys have since learned what many of us have known for years: that interest rates can and will go up when the situation gets bad enough. So, what happens if rates continue to rise above and beyond those CBO used in its projections? Even a minuscule 0.1-point rise above the baseline would produce an additional $324 billion on the deficit over the 2025-2034 period.

The same is true with inflation, which, as every shopper can see, has yet to be defeated. If inflation, as I fear, doesn't go away as fast as predicted by CBO—largely because debt accumulation is continuing unabated—it will slow growth, increase interest rates, and massively expand the deficit. To be precise, an increase in overall prices of just 0.1 points over the CBO baseline would result in higher interest rates and a deficit of $263 billion more than projected.

Now, imagine all these variations from the current projections happening simultaneously. It's a real possibility. The deficit hike would be enormous, which could then trigger even more inflation and higher interest rates. The question that remains is: Why aren't politicians on both sides more worried than they seem to be?

What needs to happen before they finally decide to treat our fiscal situation as a real threat? President Joe Biden doesn't want to tackle the debt issue. In fact, he's actively adding to the debt with student loan forgiveness, subsidies to big businesses, and other nonsense. Meanwhile, some Republicans pay lip service to our financial crisis, but few are willing to tackle the real problem of entitlement spending.

The time for political posturing is over. The longer we wait to address these issues, the more severe the consequences will be for future generations. It's time for our leaders to prioritize the nation's long-term economic health over short-term political gains and take bold steps toward fiscal responsibility. Only then can we hope to secure a stable and prosperous future for all Americans.

COPYRIGHT 2024 CREATORS.COM.

The post The Congressional Budget Office's Alternative Scenarios Forecast a Dire Economic Picture appeared first on Reason.com.

President Joe Biden says, "I know how to make government work!"

You'd think he'd know. He's worked in government for 51 years.

But the truth is, no one can make government work.

Biden hasn't.

Look at the chaos at the border, our military's botched withdrawal from Afghanistan, the rising cost of living, our unsustainable record-high debt.

In my new video, economist Ed Stringham argues that no government can ever work well, because "even the best person can't implement change….The massive bureaucracy gets bigger and slower."

I learned that as a consumer reporter watching bureaucrats regulate business. Their rules usually made life worse for consumers.

Yet politicians want government to do more!

Remember the unveiling of Obamacare's website? Millions tried to sign up. The first day, only six got it to work.

Vice President Joe Biden made excuses: "Neither [Obama] and I are technology geeks."

Stringham points out, "If they can't design a basic simple website, how are they going to manage half the economy?"

While bureaucrats struggled with the Obamacare site, the private sector successfully created Uber and Lyft, platforms like iCloud, apps like Waze, smartwatches, etc.

The private sector creates things that work because it has to. If businesses don't serve customers well, they go out of business.

But government is a monopoly. It never goes out of business. With no competition, there's less pressure to improve.

Often good people join government. Some work as hard as workers in the private sector.

But not for long. Because the bureaucracy's incentives kill initiative.

If a government worker works hard, he might get a small raise. But he sits near others who earn the same pay and, thanks to archaic civil service rules, are unlikely to get fired even if they're late, lazy, or stupid.

Over time, that's demoralizing. Eventually government workers conclude, "Why try?"

In the private sector, workers must strive to make things better. If they don't, competitors will, and you might lose your job.

Governments never go out of business.

"Companies can only stay in business if they always keep their customer happy," Stringham points out. "Competition pushes us to be better. Government has no competition."

I push back.

"Politicians say, 'Voters can vote us out.'"

"With a free market," Stringham replies, "the consumer votes every single day with the dollar. Under politics, we have to wait four years."

It's another reason why, over time, government never works as well as the private sector.

Year after year, the Pentagon fails audits.

If a private company repeatedly does that, they get shut down. But government never gets shut down.

A Pentagon spokeswoman makes excuses: "We're working on improving our process. We certainly are learning each time."

They don't learn much. They still fail audits.

"It's like we're living in Groundhog Day," Stringham jokes.

When COVID-19 hit, politicians handed out almost $2 trillion in "rescue" funds. The Government Accountability Office says more than $100 billion were stolen.

"One woman bought a Bentley," laughs Stringham. "A father and son bought a luxury home."

At least Biden noticed the fraud. He announced, "We're going to make you pay back what you stole!

No. They will not. Biden's Fraud Enforcement Task Force has recovered only 1 percent of what was stolen.

Even without fraud, government makes money vanish. I've reported on my town's $2 million toilet in a park. When I confronted the parks commissioner, he said, "$2 million was a bargain! Today it would cost $3 million."

That's government work.

More recently, Biden proudly announced that government would create "500,000 [electric vehicle] charging stations."

After two years, they've built seven. Not 7,000. Just seven.

Over the same time, greedy, profit-seeking Amazon built 17,000.

"Privatize!" says Stringham. "Whenever we think something's important, question whether government should do it."

In Britain, government-owned Jaguar lost money year after year. Only when Britain sold the company to private investors did Jaguar start turning a profit selling cars people actually like.

When Sweden sold Absolut Vodka, the company increased its profits sixfold.

It's ridiculous for Biden to say, "I know how to make government work."

No one does.

Next week, this column takes on Donald Trump's promise: "We'll drain the Washington swamp!"

COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

The post No One Can Make Government Work appeared first on Reason.com.

• For the first time, Roblox is making it easier for anyone to create in Marketplace.
• Marketplace is a powerful place for creators and brands to connect with their audience.
• We’re expanding Marketplace to be more personal and to foster more self-expression.
• We’re developing new tools and systems to ensure that Marketplace is safe and that creators’ and brands’ IP is protected. 

At Roblox, we’re building an immersive platform for connection and communication where 71.5 million users* come every day to entertain themselves, hang out with friends, and have fun. 

Nearly everything users discover on Roblox is made by our global community of creators. And our job is to help creators make the experiences, avatars, clothing, and accessories our users will enjoy.

Since 2019 we’ve allowed, through application only, a small and growing number of people to create 3D virtual items in Marketplace, one of the key destinations on Roblox for users to shop and express themselves through their avatars. 

Today, we’re making it easier for anyone to create in Marketplace. This will be a powerful step forward for creators and brands to market a diverse collection of avatars, clothing, and accessories, and to connect with their audience.  

One of the biggest benefits of this is the surge of great new content that we expect will soon be available there. Millions of users already visit Marketplace every day, and in December, 2023, nearly 71 percent of them spent time editing their avatar. And people have bought billions of items there, including nearly 1.6 billion digital fashion items during the first nine months of 2023. Brands are also getting in on the action: in 2023, our brand partners sold about 27 million items on Roblox.

adidas is bringing its iconic sport and lifestyle brand to Roblox

A great example is adidas. The brand has collaborated with Roblox creators like Rush_X and CoffeeNerdz on a diverse catalog of hundreds of items, including rare, sold-out Limiteds like its Neckpiece. adidas is bringing its iconic sport and lifestyle product to Roblox and plans to experiment with a shopping experience where users can create their own adidas virtual items and outfits.

In Marketplace, some creators have found success by diversifying the variety of things people can buy. A great example is Lirn, an original Marketplace creator, who wanted to fill a gap in gaming for authentic Black hairstyles. A self-taught creator, she’s collaborated with brands like Gucci, and created items like her HeadScarf, Bantu Knots, Pigtails Locs, Box Braids, and others. Roblox users have bought millions of her items. 

By opening up creation on our platform, we’re now able to welcome more creators like Lirn. Moving forward, here are the three areas we’re focusing on to achieve this:

• Making creation easier for anyone
• Evolving Marketplace to foster more self-expression
• Laying the foundations of a healthy Marketplace 

Making Creation Easier for Anyone

Making it easier for anyone to create and sell 3D virtual items in Marketplace and/or in experiences is just the start. We’re also working to inspire professional creators to build successful businesses on our platform by developing new ways to make creation on Roblox easier, regardless of their experience level. 

For example, our new Avatar Auto Setup tool leverages AI to quickly and automatically convert 3D models into avatars people can use on Roblox right away. Using this tool, which is launching broadly in the coming month, can reduce the time it takes to create an avatar from days to minutes.

Our new Avatar Auto Setup tool quickly converts 3D models into avatars**

And soon, we’ll offer templates allowing creators and brands to build customizable shopping experiences dedicated to the buying and selling of avatar items. For example, Dress to Impress is a space that celebrates diversity and inclusivity, and where users can dress up as themselves and then walk a runway or vote on others’ looks. 

There’s a growing number of experiences like this, and we’ll begin by surfacing them in Marketplace, which will help connect the creators and brands who make them with the broader audience there.

Evolving Marketplace to Foster More Self-Expression

We want Marketplace to be a more inspiring, personalized, and social shopping experience than ever before. In the coming year, we’ll expand what’s available there beyond individual items and focus on developing an avatar-first shopping experience. This will create more personalized and diverse content and unlock social shopping. It will also provide new ways for creators and brands to share their collections and connect with their audience.

Avatar-first shopping experience

Buy entire outfits or mix-and-match before you buy.**

Since its inception, Marketplace has been dedicated to selling individual avatar items. Now, the Marketplace shopping experience is evolving. Users will be able to find inspiration from styled avatars and outfits and buy an entire outfit’s items, or just some of it. Shopping in Marketplace will soon be similar to the physical world. When users look for a specific item, they’ll be able to see how everything they discover would look in their existing wardrobe or what they might wear it with. 

That’s important because we know that when users shop in Marketplace, they want to complete their avatar’s look with multiple items. In fact, users buy more than one item 60% of the time.

In addition, Roblox users can search for outfits. That means creators and brands can express their full creative vision by selling entire looks and avatars rather than just single items. And creators will be able to collaborate and sell outfits made of items by different people.

More Personalized and Diverse Avatar Content

We know that many people on Roblox want to express their individual personalities and identities. To do that, shopping needs to be personalized and it should be easy to move between discovery and avatar customization. That’s why we’re developing new tools that make all that possible. 

For example, AI has become a crucial technology across our entire platform, powering things like creation and safety. Soon, it will provide individual shoppers with diverse and personalized items rather than showing everyone the same list. Someone might see collections or outfits from creators or brands that fit their style or outfits that are popular with their friends. They might also see trending shopping experiences, or seasonal collections (like for Halloween or Christmas).

A More Social Marketplace Will Unlock Users’ Creativity

Digital fashion is increasingly a source of inspiration, and we believe the next wave of fashion designers will emerge on our platform. We want to support their efforts, and we’re proud to see digital designs created on Roblox recreated in the physical world. For example, at RDC 2023, we showcased physical replicas of two Parsons School of Design students’ Roblox creations. 

At RDC 2023, we showcased physical replicas of two Parsons School of Design students’ Roblox creations.

Going forward, we’ll make it easier for users to discover and follow new creators and brands and always stay up to date on their latest offerings. In turn, creators and brands will have new ways to connect with their audience and showcase their creations.

Many people see their avatars as intrinsically social — a way to connect with friends. We want to help them share their newest avatar outfits. Many users and creators are already doing that by posting screenshots or videos on external social or messaging platforms.

WhoseTrade, who created 20 items which sold more than 100,000 times (and dozens more with at least 50,000 sales), is an exceptional example. He collaborated with the electronic music brand Monstercat on a rare Limited that sold for 1 million Robux, as well as with Nivea. Like others, he’s significantly grown his social channels by posting his creations.

Soon, users will be able to share their latest avatar creations or newly-purchased items on Roblox. We think this will unlock more creativity for many users. It will also help them become curators and influencers while boosting creators’ exposure.

Laying the Foundations of A Healthy Marketplace

We’ve developed new methods to help creators and brands find success. Those include tools to defend their IP, maximize their earning potential, and simplify managing competitive pricing. 

Protecting Creativity

We recently launched Rights Manager, which helps creators, developers, and brands manage their content and IP on Roblox, and increases transparency around filing removal requests. 

We’ve also introduced a publishing advance system that inspires creators to focus on their highest-potential creations rather than generic items that distract buyers. 

At the same time, to ensure accountability and deter bad actors, creators wanting to build on Roblox must verify their identity through our ID verification process. This allows us to enforce our Marketplace policies and deter violators from returning to the platform.

An Economy Responsive to Supply and Demand

Our virtual economy should reflect market conditions, so we’re implementing a new system to ensure prices on Marketplace respond to supply and demand.

Previously, some creators had a difficult time knowing how to price their items and when such prices should be increased or reduced in response to fluctuating market demands.  Guessing at how to price items does not benefit creators or buyers.  

Our new system can help support smarter pricing to better reflect market conditions by automatically setting the lowest price in an item category based on demand. We also give creators controls that let them set rules for how much to charge for their items relative to these dynamic prices. We’re confident this will help make sure creators can earn a fair return while giving consumers more access to items at fair market prices.

Diverse Ways of Expression

We know that the Roblox ecosystem is richer and stronger when we enable varied and diverse ways for people to create and express themselves. We’re excited to build tools and systems that expand our creator community while giving people more opportunity to buy things they’ll love.

____________________________________________________________________________

* As of Q4 2023

** Rendering shown for illustrative purposes only. Actual features and other visual depictions may vary and are subject to change at any time.

The post Making Creation and Expression Easier for Anyone In Marketplace appeared first on Roblox Blog.

The Republican chairman of the House Budget Committee made news recently by announcing that if his party is serious about changing the fiscal path we are on, they'll have to consider raising taxes. Politics is about compromise, so the chairman is right. Every side must give a little. However, "putting taxes on the table" is not as simple a fix to our debt problems as some think.

Looking at recent Congressional Budget Office reports, one can have no doubts about the fiscal mess. Annual deficits of $2 trillion will soon be the norm. Interest payments on the debt will exceed both defense and Medicare spending this year and become the government's largest budget item. With no extra revenue available, the Treasury will have to borrow money to cover these expenses. Meanwhile, we're speeding toward a Social-Security-and-Medicare fiscal cliff that we've known of for decades, and we'll reach it in only a few years.

Talking about the need for a fiscal commission to address Washington's mountain of debt, the committee chair, Rep. Jodey Arrington (R–Texas), told Semafor, "The last time there was a fix to Social Security that addressed the solvency for 75 years, it was Ronald Reagan and Tip O'Neill, and it was bipartisan. It had revenue measures and it had program reforms. That's just the reality." He made these comments after some people warned that a fiscal commission is a gateway only to raising taxes.

I understand the worry. That's what the most recent deficit reduction commission tried to do. And while I don't believe this is what Arrington is planning, I offer a warning to the chair and to the future commission: If the goal is truly to improve our fiscal situation, as defined by reducing the ratio of debt to gross domestic product (GDP) or reducing projected gaps between revenue and spending, increasing tax revenue should be limited to the minimum politically possible.

For one thing, our deficits are the result of excessive promises made to special interests—mostly seniors in the form of entitlement spending—without any real plans to pay. The problem is constantly growing spending, not the lack of revenue and taxes. The common talking point from the left that rich people don't pay their fair share of taxes is a distraction. Not only is our tax system remarkably progressive, but there are not enough rich people to fleece to significantly reduce our future deficits.

Furthermore, the work of the late Harvard economist Alberto Alesina has established that the best way to successfully reduce the debt-to-GDP ratio is to implement a fiscal-adjustment package based mostly on spending reforms. A reform mostly geared toward tax increases will backfire as the move will slow the economy in the short and longer terms, causing it to ultimately fail to raise enough revenue to reduce the debt relative to GDP. Legislators, unfortunately, have made this mistake many times without learning any lesson—at least until the deal that was cut in 1997.

As a 2011 New York Times column by Catherine Rampell reminded us, until then, all deficit-reduction deals were very tax-heavy. What the article didn't mention is that they failed to reduce the deficit. What distinguishes the 1997 deal is that it cut both spending and taxes. The result was the first budget surplus in decades helped by a fast-growing economy. Now, this lesson doesn't mean that a fiscal commission must cut taxes, but it does caution against attempting to reduce the debt largely by raising taxes.

Another risk looms in the idea of a tax-and-spending compromise; that the tax increases will be implemented while the spending cuts won't. We have many examples of this pattern, but I'll recount just one: In 1982, President Ronald Reagan made a deal with Congress (the Tax Equity and Fiscal Responsibility Act) which would have raised $1 in revenue for every $3 in spending cuts.

There were tax hikes, indeed. But instead of spending cuts, Reagan got lots of spending increases. Remembering the story years later in Commentary magazine, Steven Hayward wrote, "By one calculation, the 1982 budget deal actually resulted in $1.14 of new spending for each extra tax dollar."

The moral of this story is that putting revenue on the table to reduce the debt has a bad track record. As such, the chairman, who I believe is serious about putting the U.S. on a better fiscal path, will have to be careful about whatever deal is made.

COPYRIGHT 2024 CREATORS.COM.

The post A Bipartisan Tax Hike Won't Fix This Deficit appeared first on Reason.com.

America is celebrated for its economic dynamism and ample and generously paid employment opportunities. It's a nation that attracts immigrants from around the world. Yet Americans are bummed, and have been for a while. They believe that life was better 40 years ago. And maybe it was on some fronts, but not economically.

Surveys repeatedly demonstrate that Americans view today's economy in a negative light. Seventy-six percent believe the country is going in the wrong direction. Some polls even show that young people believe they'll be denied the American dream. Now, that might turn out to be true if Congress continues spending like drunken sailors. But it certainly isn't true based on a look back in time. By nearly all economic measures, we're doing much better today than we were in the 1970s and 1980s—a time most nostalgic people revere as a great era.

In a recent article, economist Jeremy Horpedahl looked at generational wealth (all assets minus all debt) and how today's young people are faring compared to previous generations. His findings are surprising. After all the talk about how Millennials are the poorest or unluckiest generation yet, Horpedahl's data show them with dramatically more wealth than Gen Xers had at the same age. And this wealth continues to grow.

What about income? A new paper by the American Enterprise Institute's Kevin Corinth and Federal Reserve Board's Jeff Larrimore looks at income levels by generation in a variety of ways. They find that each of the past four generations had higher inflation-adjusted incomes than did the previous generation. Further, they find that this trend doesn't seem to be driven by women entering the workforce.

That last part matters because if you listen to progressives and New Right conservatives, you might get a different story: that today's higher incomes are only due to the fact that both parents must now work in order for a family to afford a middle-class lifestyle. They claim that supporting a family of four on one income, like many people did back in the '70s and '80s, is now impossible. Believing this claim understandably bums people out.

But it's not true. One of its many problems, in addition to the data evidence provided by Corinth and Larrimore, is that it mistakenly implies that single-income households were the norm. In fact, as early as 1978, 50 percent of married couples were dual earners and just 25.6 percent relied only on a husband's income. I also assume that there are more dual-income earners now than there were in the '80s. While this may in fact be true for married couples (61 percent of married parents are now dual-earners), because marriage itself has declined, single-earner families have become relatively more common.

Maybe the overall morosity on the economy has to do with the perception that it's more expensive to raise a family these days than it used to be. Another report by Angela Rachidi looks at whether the decline in marriage, fertility, and the increase in out-of-wedlock childbirths are the result of economic hardship. She finds that contrary to the prevailing narrative, "household and family-level income show growth in recent decades after accounting for taxes and transfers." Not only that, but "the costs of raising a family—including housing, childcare, and higher education costs—have not grown so substantially over the past several decades that they indicate an affordability crisis."

So, what exactly is bumming people out? We may find an answer in the 1984 Ronald Reagan campaign ad commonly known as "Morning in America." It begins with serene images of an idyllic American landscape waking up to a new day. It features visuals of people going to work, flags waving in front of homes, and ordinary families in peaceful settings. The narrator speaks over these images, detailing improvements in the American condition over the past four years, including job creation, economic growth, and national pride.

I believe this feeling is what people are nostalgic about. It seems that they are nostalgic about a time when America was more united and it was clearer what being American meant. Never mind that this nostalgia is often based on an incomplete and idealized memory of an era that, like ours, was not perfect.

This is a serious challenge that we need to figure out how to address. One thing that won't help, though, is to erroneously claim that people were economically better off back then and call on government to fix an imaginary problem.

COPYRIGHT 2024 CREATORS.COM.

The post The Economy Is Doing Way Better Than Many Believe appeared first on Reason.com.

I first arrived in Silicon Valley in 1977 — 45 years ago. I was 24 years old and had accepted a Stanford fellowship paying $2,575 for the academic year. My on-campus apartment rent was $175 per month and a year later I’d buy my first Palo Alto house for $57,000 (sold 21 years later for $990,000). It was an exciting time to be living and working in Silicon Valley. And it still is. We’re right now in a period of economic confusion and reflection when many of the loudest voices have little to no sense of history. Well my old brain is crammed with history and I’m here to tell you that the current situation — despite the news coverage — is no big deal. This, too, shall pass.

But what about the layoffs at Meta and Twitter? Elon is crazy! WTF???

On February 25, 1981, Apple Computer CEO Mike Scott fired 40 percent of the company’s engineering staff at a time when sales were doubling month-over-month and the company had no budgets because there was no way they could spend money fast enough to need budgets. Scott, who left Apple, himself, two months later, said he fired all those engineers and support staff because he feared four year-old Apple was becoming “complacent.” People were gone by the end of the day, when Scott held a companywide beer bust.

Cataclysmic change is par for the course in both startup culture and high tech. If there is going to be a next wave the previous wave has to die. Above is a chart I found from 2015 that shows the Silicon Valley economy starting in 1976. If we were to update this chart there would be a more recent boom, post social media, that I would label Artificial Intelligence, not to be confused with the late-1980s Artificial Intelligence bust that we’ve all forgotten about.

That original AI debacle is significant because it was caused by over-enthusiasm. The idea of AI made perfect sense in 1987 — the exact same sense it makes today — but nobody really understood how much computing power would be required to make those dreams come true. If AI was impractical in 1987 but is practical today thanks to Moore’s Law, how bad was our aim, exactly?

Our aim was pathetic and fortunes were lost on that pathos.

Let’s do the math. The original AI funding boom began in the late 1980s. Implicit in the VC model at the time was it taking no more than two Moore’s Law cycles from initiating the wave to launching real products. If VCs were funding companies in 1987, they expected big things from one or more of those startups by 1990. Moore’s Law said the cost of computing drops by 50 percent every 18 months so that implies that VCs in 1987 and the founders who were pitching to those VCs thought that AI would be technically practical by 1990 at which point a basic unit of computing power that cost one 1987 dollar would cost 25 cents in 1990.

IF AI is indeed economically practical today (some people still aren’t convinced that it is) mid-2021 marked 23 complete Moore’s Law cycles, meaning the computing power that cost $1 in 1987 had been reduced to $0.00000006.

Venture capitalists who bet several hundred million 1987 dollars that AI would have some chance of being economically practical at $0.25, were wrong by 48 million X.

It’s easy to look back, make these calculations, and feel smug, but that’s not even close to my point. My point is that the very VCs who lost all that money are generally zillionaires today. They kept betting on what was, for the most part, a growing tech economy.

The most important part of being a successful venture capitalist in the last 40 years has been maintaining some dry powder for future investments and staying in the game.

I could easily argue that AI in 1987 looks very similar to the metaverse in 2021. Meta (formerly Facebook) is losing $10 billion per year betting on its metaverse strategy. Recent layoffs suggest that Meta CEO Mark Zuckerberg is reevaluating his expected timeline for success.

How long can Zuckerberg afford to continue dumping billions into metaverse development? Given Meta’s corporate structure giving Zuckerberg personal voting control of the company, that question comes down to how long Meta will have enough excess cashflow to cover the costs. IF Meta is cutting its burn rate in half with these layoffs (a good argument I think) Zuckerberg can continue spending at this rate… forever. This assumes Meta continues to make lots of money with current products, but it also identifies Zuck as probably the only person in the history of tech who could make this bet pay off IF the meta verse actually becomes the next big thing.

It will be interesting to see what happens with Meta. Zuck might just run out of energy or — more likely — some competing next big thing may come along to distract him. I’m not sure it really matters much.

What does matter is that in high tech change is the norm, flux is nearly constant, and what we are seeing in the current weakness is probably change that should have happened years ago but for all the cheap money.

Silicon Valley relies on startups for ideas and growth. Startups require cheap office space and engineers looking for work. Boom and bust is not a bad thing for Silicon Valley it’s how Silicon Valley evolves.

This too shall pass.

Last week there was a press release you might easily have missed. A Distributed Autonomous Organization (DAO) called OrangeDAO is cooperating with a small seed venture fund called Press Start Capital to establish the OrangeDAO X Press Start Cap Fellowship Program for new Web3 entrepreneurs. Successful applicants get $25,000 each plus 10 weeks of structured mentorship plus continued access to the more than 1200-member OrangeDAO network. In exchange, OrangeDAO and Press Start get to invest in the resulting companies, if any, produced by the class. 

Big deal, it’s Y Combinator Junior, right?

Wrong. It’s Y Combinator on steroids.  

This second-generation YC has been released in the wild where it will replicate and grow unconstrained. Expect to see more deals like this one.

A Distributed Autonomous Organization is a financial partnership that leverages blockchain technology to help multiple users make decisions as a single entity. There are many DAOs around and hardly anybody understands them or knows what they are good for. Mainly they have seemed to be involved in the NFT market. But OrangeDAO is different. It has 1200+ members and every one of those members is a graduate of the Y Combinator startup accelerator. They are verified Y Combinator company founders, so they’ve all had similar entrepreneurial experiences and see business much the same way as a result. OrangeDAO seems to have big plans and to make those plans happen in August the DAO, itself, raised $80 million in venture capital, with their first use of that capital being these Fellowships.

I think this will change forever venture capital and the world economy.

It represents a new stage in the evolution of venture capital. In many senses it is the democratization of VC.

It’s no surprise that OrangeDAO comes from Y Combinator alumni. YC, itself, disrupted the VC model and this Fellowship continues that disruption.

It’s turning what was a disruption into an ecosystem.

Think about the VC model. The original Silicon Valley VC wasn’t even from Silicon Valley — it was Sherman Fairchild from Fairchild Camera in Baltimore, who came to Mountain View to invest in Shockley Semiconductor in 1954. 

This was the Tycoon-as-VC model, which was soon replaced by the Professional VC model where dumb institutional money was invested by VCs (generally lawyers or former CFOs) who didn’t really understand what they were investing in. But there were enough opportunities that they could “spray and pray” and succeed on the simple odds. Tim Draper’s grandpa and Arthur Rock typified this generation. Few people realize that Rock invested only $75K in Apple… ever.

Eventually there rose in Silicon Valley a technocracy with a new class of VCs who DID more or less understand their investments. Don Valentine and Tom Perkins led this charge and ultimately hired associates and partners who looked just like them, which describes every person today working on Sand Hill Road.

Typical of this glory age of VC, there were dumb institutional investors, technical or semi-technical professional VCs, and an emerging class of entrepreneurs who needed progressively LESS money as technical markets blossomed and third-party services became available.

At this point there emerged the YC/Techstars, Angel investing, and eventually crowdfunding models. YC brought with it two revolutionary ideas: 1) you didn’t have to have a VC friend to get a chance to pitch your idea, and; 2) there was a VC role for educating entrepreneurs. 

Prior to YC (and to this day in most places) VCs like to keep their entrepreneurs ignorant, so they can be more easily controlled. YC worked to subvert that control.

Angel investing was something parallel to YC — experienced (generally self-taught — the hard way) entrepreneurs playing VC together over dinner for smaller deals. Remember The Band-of-Angels had Gordon Moore at those dinners. But total deal sizes were limited because it wasn’t professional — not full-time work for anyone.

Crowdfunding was also parallel and totally wacky because it was truly democratic: nobody knows anything. In crowdfunding EVERYONE is stupid. Neither the investors, managers, nor entrepreneurs know what they are doing, which is why crowdfunding hasn’t been a big success to date.

I had an Indian friend who worked at Intel  and lived in Roseville in a neighborhood filled with Indian engineers who worked at Intel and lived in Roseville. The average first-generation Indian engineer in California keeps in his/her checking account $100,000 “just in case.” My friend used to argue that he could walk around the block with a good pitch deck and get seed funding for his next venture by the time he made it back to his own doorstep. It was a brilliant observation.

These OrangeDAO Fellowships are like that Indian neighborhood in Roseville. The DAO members all have similar backgrounds, similar values, and similar risk tolerances. THERE ARE MORE OF THEM, so they can do bigger deals. And — here’s the important bit — THEY ARE ALL YC-EDUCATED and connected globally through the blockchain.  They not only know many of the same things, they have a sense of where this knowledge comes from and why it is useful. That’s Paul Graham’s legacy at YC.

But this is a second-through-Nth-generation movement, at the very center of which is not just education, but FURTHER education — the very concept that education, itself, is a legacy to be nurtured and extended. Think land-grant American universities of the 19th century, In the YC-based DAO we have people who want the next generation of entrepreneurs to be even better-educated. It’s not some egalitarian goal, either: they see it as key to success for the whole thing.

Smart people with good ideas will self-identify, be funded at a subsistence level to allow them to develop those ideas and prove their worth, then they can participate on a truly level playing field for the first time. 

YC and Techstars and their copycat cousins did this too, BUT NEVER AT SCALE.

Gone is the Tycoon, gone is the professional VC who doesn’t understand his tech, gone soon will be the angels (subsumed into the DAO model), and gone for the most part are the asshole VCs whom entrepreneurs grow to hate (not all of them, but a lot).

Done correctly, this model is essentially Meritocratic VC. If the idea is good, the market is ready, and the people know what they are doing, the capital will be there. Everything has the prospect of being better under this evolved system, or at least that’s the way I see it. And it all comes down to the centrality of education combined with scale. 

Now here is the $100 TRILlION question: can this Middle Class VC model be exported to Topeka and Timbuktu?

I think it can be.

The problem with all the Silicon Glens and Silicon Prairies, and Silicon Forests and Silicon Gulags that failed repeatedly over the last 30 years is they were copying the wrong parts of the successful model. They didn’t have the people and the institutional knowledge of Silicon Valley and Sand Hill Road, but this OrangeDAO DOES. 

It’s a containerized copy of successful Silicon Valley culture that carries with it all dependencies, even money.                         .

Enlarge / Polluted street scenes like this will remain common in the United States, which will abandon ambitious fuel efficiency standards in the face of complaints from automakers and unions. (credit: Getty Images)

It appears as if ambitious new fuel efficiency regulations that would require Americans to adopt many more electric vehicles are to be watered down. Last year, President Biden's administration published proposed new Corporate Average Fuel Economy regulations for 2027–2030, regulations that would require automakers to sell four times as many zero-emissions vehicles as they do now.

But opposition to the new CAFE standards has been fierce, and now Reuters reports that the White House is backing down and will issue new guidelines with less ambitious goals in the coming weeks.

The White House's goal had been for US EV adoption to reach 50 percent of all new light vehicle sales by 2030, rising to 60 percent by 2032. In part, it proposed changing the modifier applied to each new zero-emissions vehicle when used to calculate an automaker's fleet emissions.

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Inflation stressing you out? Making you wish you had just a touch of nicotine in your system? Unfortunately, that'll cost a lot. While prices economywide have risen 3.1 percent in the last year, cigarette prices have jumped 8 percent. On top of federal and state taxes that often make up half the price of a pack, tobacco companies tend to raise their prices faster than inflation to make up for declining sales volume. These and the rest of the numbers in the Reason Sindex use data from November 2023.

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