Politics. Smart people are a dime a dozen. Especially in the over-compensated world of the capital markets. Imagination and creativity are as scarce as hen’s teeth.
Mike Taylor, Keith McCullough’s guest at the Macrocosm panels at HedgeyeLive this weekend, pointed out that private funds like Tiger Global had turned to private equity and venture investing when they “ran out of ideas.” Put another way, they have more money than sense.
And they are not alone.
Lack of imagination has plagued the Republican Party from Bill Clinton’s betrayal of Newt Gingrich when he walked away from a 1997 bipartisan agreement on Social Security and Medicare reforms to John McCain’s “Nay” vote on repeal of the Affordable Care Act.
For most of that time, the GOP abandoned their core principles of fiscal restraint and reduced itself to opposing only spending its members didn’t like. That is, when they had time between the culture wars.
The creative juices of the Democrats dried up similarly. As bipartisan cooperation slipped through Clinton’s hands, the party doubled and tripled downed on President Lyndon Johnson’s strategy of building coalitions through legislative actions targeting specific constituencies, including racial and ethnic minorities and environmental groups.
Until Donald Trump broke the Republican party, and the SARS-CoV-2 pandemic broke/is breaking the Democratic party, both parties have been joined in a long, slow slide into political nihilism that nicely tracks the economic wasteland Ye Old Wall Street has promoted.
The source of the problem is the same. Large sums of free money with strings attached made independent thought a career killer. Members of both parties, eager to please the bundlers, the PACs and industrial scale individual donors, have found it impossible to adapt to a changing world.
Former Louisiana Governor, Bobby Jindal, recently wrote an op-ed in The Wall Street Journal rehashing health policies and objectives from the last decade and a whole pandemic ago. The White House believes it can fight inflation by reducing premiums on ACA plans even though the ACA contributed greatly to health care price inflation we have endured for almost a decade.
Original ideas are precious few. The old ones have proven ineffective or worse. That intellectual bankruptcy paired with a lot of free money means but one thing:
Write downs.
Policy. A major shortcoming of the donor class is that they often have no idea what they are talking about, having confused being rich with deep subject matter expertise. How else does a man of great intelligence like Bill Gates confuse an actual virus with the metaphorical version?
At least, that is my most charitable defense of his company’s and his foundation’s influence on public health policy. Recently, Gates, while promoting his new book acknowledged some of the reaction to COVID was unnecessary. Implicit in his remarks is a recognition that you cannot clean humanity’s hard drive.
Thanks for turning out, Bill.
The other problem with billionaires is that, while they love to influence government by contributing to its admiration of the status quo, they really don’t need it all that much. So, it is easy to insist that the entire American economy should close for six to 10 weeks – as Gates did in March 2020. It certainly wasn’t going to affect the Gates household, or whatever is left of it now.
A third problem with well-meaning, but not particularly competent philanthropists like Gates is that, in an ever so violent and unpredictable world, they don’t – or can’t – get out much.
They get to skip standing in line at the grocery store and picking up mulch at the garden center. The data inputs of the models at Microsoft are quickly confused with actual people.
Incoherent, unpredictable people.
The bloom is off the Gates rose for certain even for those people who didn’t buy into the whole-chip-in-the-RNA-vaccines theory. As write downs happen in Silicon Valley and distressed debt becomes a thing again, the rich start to look a lot less worthy of the leadership role they held.
Power. As a weekend at HedgeyeLive can attest, people have already begun to move on from the uninspiring institutions that have served the nation so poorly these last few years.
There is nothing like a group of people that made money - or didn’t lose it - during a generational drawdown to illustrate precisely why taking matters into your own hands is the path forward. The bond and SPAC kings, the tech titans are dethroned.
It won’t just be finance that is affected. Backlogged hospitals have and will continue to push people toward their own health solutions, aided by technology and a new appreciation for risk. Health bureaucrats and pandemic pushers have been revealed for the frauds there are.
That power shift leads us happily back to the principles of individual rights and responsibilities that are the philosophical underpinnings of Thomas Jefferson’s U.S. Constitution. It was the enshrinement of principles and not people or dynasties that served as the basis for the American experiment.
Those principles are bruised and battered but, thankfully, still in the ring. All you need to do is take a look around the Greenwich Hyatt, ironically, to see that.
Have a great rest of your weekend.
Emily Evans
Managing Director – Health Policy
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