The Labor Department once again showed a rising yearly inflation rate with the release of the consumer price index for March 2022. U.S. inflation rose to 8.5% from March 2021 to March 2022, representing the country’s highest 12-month inflation since 1981. The CPI for March 2022 alone was 1.2%, the highest monthly inflation observed in the U.S. since September 2005. The increased inflation rate has led to much public dismay about the current state of the economy and the performance of the Biden Whitehouse.

The same reason for the drastic monthly inflation in September 2005 can also explain the excessive increase in March 2022 -- chiefly due to a surge in gasoline prices. Rising gasoline prices aren’t usually a sign of progress, but in this case, they may represent a north star of inflation slowly receding throughout the American economy. Yes, the U.S. had its worst monthly inflation in nearly 20 years, but that was primarily due to a drastic increase in energy costs due to the outbreak of the war in Ukraine. Energy prices jumped 11%, while gasoline prices increased 18.3%, which offset other disinflationary markers for the CPI.

The Good News

Many of the culprits responsible for the high inflation for the past year are finally cooling off. Used cars and trucks received a lot of attention for drastic price increases after the reopening of the economy. 12-month inflation peaked at a 45.3% increase in June 2021 and decreased to 35.3% in March 2022. At -3.8%, the month of March represented the most considerable monthly deflation in the used car sector throughout the pandemic, including the period when many were locked down and not buying transportation.

The 12-month percent change receives the majority of media attention, and in the case of used vehicles, we should expect the year-over-year change to start rapidly declining. Even if used cars suddenly began increasing in price again, the measure will begin losing some of the highest inflated months like April and May 2021, when inflation in the sector was nearing double digits. Essentially, we should see base effects begin to lower in year-over-year inflation.

We see similar results observed in many durable goods. The pandemic resulted in a mass restriction of spending on services, leading to increased spending on products. The CPI of durables to services has been rapidly declining for decades in the U.S., only to be reverted during the pandemic. Just now, we may see the beginning of another reversal in this trend as the prices of goods level and price of services increase.

The core CPI, or the CPI less food and energy, appears to be finally slowing down. The 1-month inflation rate was the lowest in March 22 since September of last year. Base effects are keeping the 12-month change elevated for now. However, April, May, and June 2021 are the next three months on the chopping block for the 12-month change, and each month also represents the highest annual inflation rate in core CPI in two decades. In other words, expect each month forward to show lower 12-month inflation in Core CPI as the base effects of high inflation in April-June 21 come off the books.

The Bad News

While core CPI is finally relenting, headline CPI is still at monthly levels unobserved since 2005. A 1.2% increase in inflation in March gets you pretty close to the Fed target of 2% for an entire year. Extrapolated out for 12 months would result in the highest annual inflation in the U.S. since the 1940s, surpassing the dreaded 1970s stagflation crisis.

Supply chains may finally be untangling, and disposable income may be dissipating. We are witnessing a significant correction in prices in a wide range of goods from automobiles, GPUs, and microchips that surged in costs during the pandemic. Unfortunately, we do not see any decline in the two measures excluded from core CPI – food and energy.

CPI for food was 1% in March 2022, matching the previous month and the highest since April 2020. Food inflation seems to be increasing with no signs of slowing. Regarding base effects, it will be difficult for the 12-month CPI for food to decrease due to the relatively low inflation observed in food in the months that are soon to exit the measure. For food to negatively impact the 12-month CPI report, it would have to show as lower than .4% -- possible, but not a figure we have seen in over a year.

The war in Ukraine may already have an effect on commodity prices, and many experts expect the trend to continue. In March, global food prices increased to a new record, with costs soaring 13%. Ukraine was responsible for the sixth-highest exports of wheat in 2021. Due to the war, the U.N. expects 20-30% of crops to remain unharvested in the 2022 growing season. The impact of a global wheat shortage is far more problematic for E.U. and Asia than for the U.S., but we live in a global economy. Black Sea wheat is generally much cheaper than ours, which pushes the international cost of the commodity up. By all means, I would expect the annual CPI for food to increase further in the next few months.

That gets us to energy, which has quickly become the single most significant driver of headline inflation. The increases in energy prices in 2021 can largely be attributed to the reopening of the economy – energy crashed hard during the COVID pandemic in 2020, and prices returned to some normalcy. Unfortunately, prices never really stabilized and only continued to ascend pre-pandemic levels. Consumer demand returned without the same amount of supply due to supply chain crises and “capital discipline” on behalf of energy corporations unwilling to invest in growth due to fear of energy prices plummeting.

It is impossible to separate the ongoing effects of constrained energy supply via capital discipline and the invasion of Ukraine. February 2022 exhibited significant energy price increases but less so than many months of 2021. March 2022 had the highest single-month inflation in the sector in over a decade. Either way, the U.S. is combating the supply shock by releasing barrels from its strategic petroleum reserve and encouraging companies to invest further in growing supply. Biden has even called on Congress to make oil companies pay fees on wells from unused leases.

As a result of those changes, which are also happening on various levels in many countries around the world such as Europe, many forecasters believe energy costs to begin declining in the next few months. Already, we have seen Brent crude oil drop from a high of $118/barrel to under $100 on April 26. The U.S. Energy Information Association predicted the price to decline to $90 by the end of 2022. The somewhat rapid decline in oil prices over the past two weeks can largely be attributed to an oil demand shock in China due to surging coronavirus cases. Expect a lot of variation in this sector throughout the year, but the U.S. may have already seen its peak monthly energy inflation.

Final Thoughts

Inflation is one of the most enormous problems facing the U.S. economy and, subsequently, the incumbent Democrats’ chances at re-election in the 2022 midterms and beyond. It does seem like core CPI minus energy, and food is finally stabilizing, and I would predict May’s CPI release to show the first decline in 12-month % change in over a year – chiefly due to base effects. Base effects do not favor the 12-month % change for energy or food declining, and for that reason, we can also predict that 12-month inflation will again rise next month in those sectors. We will also likely see some immediate decline in monthly inflation in energy and, thus, subsequently, food.

Permanent daylight savings time is a better option than standard

On Tuesday, March 15, the Senate unanimously passed legislation to permanentize daylight savings time in the Sunshine Protection Act. The timing of the bill could not be more apt. Like the rest of America, most senators woke up with a lost hour of sleep the previous weekend, which most likely contributed to the unanimous vote between sleep-deprived cantankerous senators.

The Sunshine Protection Act would end the biannual changing of clocks to standard time in November and daylight savings time in March, which has been a staple since at least 1918. The bill still has to pass the House, and the expedited process of this bill in the senate essentially punts the decision to Congress. It is rare for the senate, which is essentially responsible for much of the current gridlock despised by many Americans, to reach majority consent. They unanimously passed the 2020 Covid relief bill under the Trump administration, but that took a dangerous oncoming pandemic. This bill was merely good timing for a measure that many consider overdue.

Year-round DST has been popular in state legislation even if they have so far lacked the ability to successfully install it permanently. The Uniform Time Act of 1966 promoted the observance of DST at the same time of the year and at the same local time in each state – unsurprisingly, instate travel while observing many different time zones was inconvenient. No state had to observe DST, but if they did follow it, they had to do so during the same time as every other state. Hawaii and Arizona stuck with standard time, and many states have attempted legislation to do the same unsuccessfully. While year-round standard time change legislation (which is in accordance with the Universal Time Act) has stalled at the state level, sixteen states have year-round DST legislation already passed and are waiting for enaction once or if Congress ever amends its 1966 bill.

Over the past few years, polling has indicated marked public support for ending changing clocks. A YouGov poll from November 2021 had 63% of U.S. citizens in favor of eliminating the change, with only 16% opposed. Of respondents in favor of the resolution, DST was chosen as the preference going forward by 48% to 29%.

Standard vs. Daylight Saving Time

There has been a wave of media reactions and expert opinions offered on the subject since the Senate vote. The most common argument in favor of standard time has come from the American Academy of Sleep Medicine, with a statement in favor of sticking with standard because it more closely aligns with the intrinsic human circadian rhythm. The AASM has had comments appear in all the newspapers of record, and for a good reason! Sleep health is an area where Americans are failing, and it makes sense if we can correct that with a simple switch to standard year-round.

The science does not seem nearly as clear as the AASM has stated. Its position can be found here in the Journal of Clinical Sleep Medicine.

“The American Academy of Sleep Medicine (AASM) is a professional society that advances sleep care and enhances sleep health to improve lives. The AASM advocates for policies that recognize that sleep is essential to health.

The period of the year between spring and fall, when clocks in most parts of the United States (U.S.) are set one hour ahead of standard time, is called daylight saving time (DST), and its beginning and ending dates and times are set by federal law (the second Sunday in March at 2:00 AM and the first Sunday in November at 2:00 AM, respectively), while the remaining period between fall and spring of the following year is called standard time.

The light/dark cycle is key in circadian entrainment. The acute alterations in timing due to transitions to and from DST contribute to misalignment between the circadian biological clock and the light/dark cycle (or photoperiod), resulting in not only acute personal disruptions, but significant public health and safety risks.”

The most significant problem with this paper is the mention of the acute effects of switching between standard time and DST. The report is half focused on the acute and half on the chronic response of DST. Still, even half a paper devoted to the acute effects of DST on an individual is incredibly unscientific when factoring in the influential confounding variable of switching to DST every year – notably, you lose an hour of sleep when switching to DST and gain an hour going back to standard. Any acute effect can be explained by either that lost hour of sleep or just the stress of changing our internal clocks an hour during the time change. For instance, “the Monday after the transition to DST, volatility in stock markets in the U.S. has been observed” is an actual line in the paper as an acute effect of switching to DST, even though the authors mention the proposed mechanism being the impact of one less hour of sleep on frontal lobe functioning.

The acute deleterious effects of switching to DST are an excellent reason to standardize a single time and end biannual clock changing but are irrelevant to whether that time should be standard or DST. DST has plenty of potential positive chronic effects that can be seen in the correlation between DST and fewer car accidents and pedestrians hit by cars. The longer daylight hours lead to lower crime rates, as a recent paper explains:

“Most street crime occurs in the evening around common commuting hours of 5 to 8 PM, and more ambient light during typical high-crime hours makes it easier for victims and passers-by to see potential threats and later identify wrongdoers.”

In support of more activity during DST, researchers analyzing the results of the American Time Use Survey found that, while attempting to control for nicer weather via temperature, the following:

“According to the ATUS data, Americans devote 165 minutes per day to indoor TV watching but spend on average 27 minutes on outdoor activities. Given the concerns about health costs and obesity, these numbers are alarming. Our finding of an additional 30 minutes spent outdoors roughly implies that an extra 10% of calories are burnt.”

The U.S. is the 12th most obese country and easily the most obese country in the west, with 36.2% of Americans exhibiting BMIs greater than 30 (Canada is second with 29.4%). Obesity is correlated with higher healthcare expenditures, decreased quality of life, disability, and premature mortality – all of which contribute to a reduction in gross domestic product for the U.S. To get an idea of the kind of reduction in GDP from high obesity rates, we have a recent study that examined Australia (29% obesity rate) and found a conservative estimate cost of obesity to be 1.7% of GDP.

If that doesn’t seem like much, the trend paints a worrisome picture for the future with obesity costing 2.5% of GDP by 2060. The paper’s authors stated that reducing the prevalence of obesity by 5% from projected levels would reduce those costs by 5.2-13.2%. Any additional caloric burn by Americans should be a goal for our health and economy. Burning an additional 10% of calories would not be the same as losing a collective 10% of body weight – keep in mind that caloric burning/physical activity is also correlated with additional caloric intake – but would still, at the very least, likely keep current obesity rates stagnant.

Larks v. Owls

We seem to have some sleep research supporting standard time and crime and physical activity supporting DST. The U.S. is generally a tired and physically lazy country that could use some policy change on both fronts. The aforementioned research is a product of society and, notably, a capitalist society that imposes rigid work schedules for all, regardless of an individual’s circadian rhythm. The typical 8 AM-5 PM day job is, therefore, more beneficial for the larks of society than the owls.

We have estimates from surveys and sleep scientists that around 40% of the population is comprised of early birds, 30% of night owls, and the remaining 30% in-between. Those that fall into the night owl chronotype are often reputed as immature and lazy. They don’t fit the early morning grind that is expected in order to work the vast majority of employment opportunities. Due to the added stress of less sleep and a disrupted circadian rhythm, night owls are also potentially twice as likely to underperform at work and be forced into early retirement due to disability. Night owl status correlates with a wide range of diseases and disorders, including psychiatric, addiction, obesity, diabetes, and dementia.

Are owls inherently unhealthy? Potentially. However, the more likely reason is the misalignment between life demands and genetic biological clocks. The argument between standard, DST, and status quo is similarly an imposition of the will of some internal clocks above others – circadian dominance. Trade-offs exist between all the options, but I find the DST consequences much easier to mitigate than the standard time drawbacks.

The lack of morning sunlight in a winter observed DST would potentially be more dangerous for kids traveling to school. If only we knew that students performed better academically and behaviorally with later start times!! Regardless of DST or standard time, we already have a well-established association between delayed start school times and increased sleep duration among adolescents, as this meta-analysis explains:

“Most studies reviewed provide evidence that delaying school start time increases weeknight sleep duration among adolescents, primarily by delaying rise times. Most of the studies saw a significant increase in sleep duration even with relatively small delays in start times of half an hour or so. Later start times also generally correspond to improved attendance, less tardiness, less falling asleep in class, better grades, and fewer motor vehicle crashes.”

Children and adolescents are falling well short of the healthy hours of sleep per night, attaining around 6.5 hours of sleep versus the recommended 8-10. For all school-board warriors upset with the trajectory of today’s youth, maybe we can try just getting the kids some shut-eye. Yes, it will stink for parents to get kids ready in the morning when they have to make it to work simultaneously. But wait, that is easily mitigated as well! We can shorten the workday by an hour in the morning and allow adults to also catch up on much-needed rest.

It is time to end circadian dominance by the early birds and embrace a more equal society for all risers. Permanent DST and shorter or delayed school and workdays would be a step in the right direction.

Biden promised “the most transformative investment in children and caregiving in generations” was coming with the passing of his Build Back Better framework. Unfortunately, Senators Manchin and Sinema killed the bill claiming the exorbitant costs were simply too much for America to afford, irrespective of the fact the bill was nearly fully offset. Part of that package included “universal preschool for all 3- and 4-year olds”:

“Preschool in the United States costs about $8,600 per year. The Build Back Better framework will enable states to expand access to free preschool for more than 6 million children per year and increase the quality of preschool for many more children already enrolled. Importantly, parents will be able to send children to high-quality preschool in the setting of their choice – from public schools to child care providers to Head Start. The program will lead to lifelong educational and economic benefits for children and parents, and is a transformational investment in America’s future economic competitiveness. In fact, research shows that every $1 invested in high-quality early childhood care and education can yield $3 to $7 over the long-run, as they do better in school, are more likely to graduate high-school and college, and earn more as adults.”

Preschool costs on average $889 per month, amounting to an average savings of $10,800 per kid. That is a sizeable investment in families that intend to send their kids to preschool. Like many other BBB proposals, this policy would lessen the potential burden of early childhood costs. The childcare tax credit similarly contributed $300 per month universally, lowering child expenses by $3600 per kid. The proposal to limit child care costs to 7% of income could be similarly helpful for parents of infants, of whom child care costs 17.1% of national median household income.

Early childhood expenses are a highly cited reason why millennials aren’t procreating. The growth rate continues to slide downward in America, nadiring at .1% in 2021. Growth was higher before the pandemic, with a rate closer to .35%. But even that rate was still the lowest in the history of the US. Trying to boost births through economic incentives makes some sense for a country lacking growth prospects. I’m uncertain that these will have massive effects (or any at all), but it makes sense to try and alleviate some of the disparities in wealth held between potential young parents today and their ancestors at childbearing age. Notably, the birth rate is usually highest among the poor and decreases with every successive decile by household income.

That’s not to say it is bad policy simply because it can’t curtail the falling population growth rate. Plenty of critics would like to grow the US population (100 Billion Americans comes to mind) for economic benefits, but it is probably a losing battle over the long run. The world growth rate is expected to decrease throughout this century until approaching zero by 2100. That said, we can at least not punish young adults for having children. Families with children under five have much lower incomes than those households without kids, even after accounting for age, education, and race. The associated decline in income of having a child under five is $14,850, or 14% of the total average household income. Most of that decline is reflected by the impact on earnings for women.

So, if prekindergarten education is good for poor and young families, then that means progressives should champion the cause? In many cases, yes, but the progressive issue for prekindergarten is murkier than you may expect – in large part due to the correlations that studies have shown of early childhood education on later life outcomes.

A study released in January delved into the potential effects of the Tennessee prekindergarten program on children’s achievement and behavior through sixth grade. The Tennessee program serves over 18,000 children a minimum of five and a half hours of instruction five days a week. The program is oversubscribed; the program’s popularity surpasses funding, which bestowed a gift upon the researchers in the form of a randomly assigned cohort. Nearly 3000 children were randomized to either a waitlist or admittance into the program. The researchers found that while kindergarten readiness was improved among those attending the program, the trend reversed by third grade – the formerly waitlisted children drew even with peers on disciplinary infractions and academic measures. Children in the control group continued to outclass those previously enrolled in the early childhood program through sixth grade.

Those results are not encouraging! Republicans already are against further spending on prekindergarten education, and it’s not hard to envision ads about the Biden administration considering trying to dumb down the next generation. Sure, it may be suitable for parents and the economy, but at what cost? This isn’t the first study that found lasting negative impacts from prekindergarten programs. Quebec has a similar program to Tennessee’s that has been studied and shown the program to correlate with children having “worse health, lower life satisfaction, and higher crime rates later in life.” It is certainly possible that some pre-K programs are meaningfully harmful to children.

There is conflicting evidence supporting early childhood education as well. A meta-analysis from 2017 of 22 high-quality early childhood studies found that early childhood education led to statistically significant reductions in special education placement and grade retention and increases in high school graduation rates. Jim Heckman, a Nobel award winner, has several papers that reflect positive long-term outcomes for early childhood enrollees. One of his papers is summarized as follows:

“This paper estimates the long-term benefits of an influential early childhood program targeting disadvantaged families. The program was evaluated by random assignment and followed participants through their mid-30s. It has substantial beneficial impacts on health, children’s future labor incomes, crime, education, and mothers’ labor incomes, with greater monetized benefits for males. Lifetime returns are estimated by pooling multiple data sets using testable economic models. The overall rate of return is 13.7% per annum, and the benefit/cost ratio is 7.3. These estimates are robust to numerous sensitivity analyses.”

It is safe to say the results of prekindergarten education are mixed. A couple of explanations are possible, but two that seem potentially likely are that some programs are better than others, and (conflictingly) more recent studies appear more negative as the research is getting better. Further studies are necessary to determine whether early education impacts later academic success.

Should the Democrats ditch its early childhood education policy? Absolutely not. The harm of only looking at childhood educational attainment from prekindergarten access is that it does not reflect the potential consequences of childcare costs on family wealth. Every dollar currently spent by families on prekindergarten would likely be better spent on keeping kids secure and comfortable, thus leading to better life outcomes. The United States spends an abysmal figure on child care – around $500 per child. Compare that to the OECD average of $14,436, let alone the Scandinavian countries above $20,000.

The educational benefits of prekindergarten certainly seem low, but freeing up adults to work and support their children is essential for a capitalistic society currently lacking growth. Even if you do not want to incentivize child-rearing, you definitely do not want to punish those young adults willing to take on the challenge of exorbitant costs of having a child.

Quite a few studies also show that the poor results of academically focused early childhood education models are not replicated by play-based models. For instance, a study of impoverished Black children found that those who attended play-based preschools performed better academically than those in academic preschools by grade four. A coauthor of the Tennessee preschool study, Dale Farran, came out with a similar idea for where the Tennessee statewide program went wrong:

“Farran points out that families of means tend to choose play-based preschool programs with art, movement, music and nature. Children are asked open-ended questions, and they are listened to.

This is not what Farran is seeing in classrooms full of kids in poverty, where “teachers talk a lot, but they seldom listen to children.” She thinks that part of the problem is that teachers in many states are certified for teaching students in prekindergarten through grade 5, or sometimes even pre-K-8. Very little of their training focuses on the youngest learners.

… In 2016, Farran published a study based on her observations of publicly funded Tennessee pre-K classrooms similar to those included in this paper. She found then that the largest chunk of the day was spent in transition time. This means simply moving kids around the building.”

America should have universal childcare, and at the very least should increase its abysmally low spending on child care. Yes, the educational benefits are small and potentially slightly detrimental. But there may also be some ability for the programs to become better as we accept that early education isn’t some magic bullet by which we can raise every kid to above-average intelligence. Preschool can simply be daycare with a bit of instruction and still have net benefits for society. Focusing on imitating positive home environments with added socialization would be a good step. That said, between universal child care and a direct child payment similar to the child tax credit, give me the direct payment. Studies of preschool outcomes are pretty muddled, but virtually every study shows poverty has deleterious effects on academic and social outcomes. If we truly want to close the intelligence gap between poor and affluent families, then let’s close that gap economically.

Between Game Pass and streaming, Xbox seeks to end the console war early this generation.

Microsoft agreed to purchase Activision Blizzard on January 17th, making the recently scandalous videogame publisher the largest ever acquisition for Microsoft. In a cash deal valued at about $75 billion, Microsoft is throwing its gigantic piles of wealth against the heads of the competition to bolster its videogame offerings. In the announcement, Microsoft said the purchase would make it the third-largest gaming company by revenue, behind Tencent and Sony. After accounting for the $7 billion in cash held by Activision Blizzard, the deal represented a significant premium above the current stock price, which has been depressed due to allegations and investigations of sexual misconduct by California regulators.

The acquisition is not a lock for passing regulatory approval, even in the current era of lax regulation. Microsoft is vertically integrating, purchasing a company that offers complementary services to its other products like Xbox and Game Pass, which is typically not often the type of acquisition that the modern FTC blocks. Matt Zoller, the anti-monopolist author over at the substack Big, has a good article on the landscape of the Biden FTC on the potential regulatory approval of the acquisition. It is a massive acquisition and could get blocked over antitrust concerns, but at this point, I would bet on the purchase going through.

This purchase is Microsoft’s ninth time visiting the videogame store since June 2018. Since then, the company has purchased Ninja Theory, Undead Labs, Compulsion Games, Playground Games, inXile Entertainment, Obsidian Entertainment, Double Fine Productions, ZeniMax Media, and now Activision Blizzard. In addition to the stable Microsoft had already built in-house or bought in prior years, those companies add to an incredible number of popular intellectual properties. Including Activision Blizzard, Microsoft now owns the following IP:

Halo

Gears of War

Minecraft

Hellblade

State of Decay

Pillars of Eternity

Wasteland

The Outer Worlds

Psychonauts

Fallout

The Elder Scrolls

Doom

Starfield

Call of Duty

Diablo

Overwatch

World of Warcraft

There are way more franchises than those listed, but those are the top-selling series now under Microsoft’s banner. The older IP isn’t nearly as valuable to most companies, but they may be pretty beneficial to Microsoft after going all-in on Game Pass. Call of Duty is the heavy-hitter from the Activision deal as the first-person shooter is the third-highest selling franchise of all time. If Microsoft can get Overwatch and Diablo sales back on track, those games also have a strong sales history with over 50 million copies sold.

Sony, Microsoft’s main competitor for many years, has far fewer top-selling franchises and this acquisition certainly puts Xbox above PlayStation going forward in the number of best-selling first-party games (although, Horizon and Spider-Man for Sony are strong bets to join best-selling franchise ranks in the future). PlayStation has been the king of first-party, exclusive games in both quantity and quality – the Sony console has been the better purchase for many years based on the games available exclusively on its console. Xbox sought to ameliorate those differences for the past decade by buying successful developers after a string of in-house failures.

Sony should be worried about the future of its consoles. Horizon, God of War, Uncharted, and Spider-Man were compelling reasons for many fans to go with the PS5 vs. the Xbox Series X, but the new games added to its portfolio can finally push Xbox over the top. Microsoft and Sony have had discussions about the future of Activision Blizzard games on PlayStation, with Sony executives saying they “expect that Microsoft will abide by contractual agreements and continue to ensure Activision games are multiplatform.” Microsoft’s Phil Spencer tweeted the following:

That is… not entirely satisfying, but it also is as good a commitment any business would expect to get out of a competitor. Microsoft has the “intent to honor all existing agreements” which implies that a falling out could occur and, even more worrisome, that once current deals lapse the company could move on from PlayStation entirely. I wouldn’t say it is a given that Call of Duty ever leaves the Sony platform – the reason Activision Blizzard was worth so much was partially due to strong sales on PlayStation. Regardless, Microsoft has a lot of new monopolistic power that they can hold over Sony to arrange more lucrative deals in Microsoft’s favor.

It is difficult to gauge how bad this deal is for Sony partially due to the focus of Microsoft on Game Pass and how much the company still views its gaming platform as a direct competitor to PlayStation. Microsoft could go for the kill by yanking all games in its arsenal from PlayStation and making XBOX the sole home to many exclusive games. The company would have to be willing to hedge short-run losses due to losing out on game sales from a console that has sold over twice as many units, but Microsoft has shown a willingness to become a loss leader in the past to gain market share. Xbox has never had Sony’s first-party game quality, but these acquisitions would put Xbox above PlayStation for many gamers. If Microsoft wanted to win the console war, they have a good shot after these recent moves.

Microsoft is a competitor of Apple and Google but still published an Xbox Cloud Gaming web application on iOS through Safari and an application on the Android Store. The Xbox platform is transitioning toward cloud gaming, whereby anyone could play their Xbox Game Pass games through any browser and several other platforms. For instance, Microsoft has already announced its plan to release cloud gaming apps on smart TVs. Add streaming devices like Apple TV and Roku, and you pretty much only have PlayStation consoles excluded at that point.

Microsoft may have enough games in its arsenal to corral a deal with Sony, resulting in Game Pass appearing on PlayStation. Sony typically receives 30% of all sales on its platform, and Microsoft would most likely want to arrange a greater take for itself. But, in exchange, Sony would be allowed to continue selling Microsoft games on its consoles. While Xbox fanboys may balk at the idea of allowing “their” first-party games on rival PlayStation, this would likely be a huge growth driver for Game Pass. The subscription service captured 70% of all gamers who use the latest Xbox consoles. Offering the service as merely an alternative to $70 games through the PlayStation store would likely convince a sizeable number of PlayStation’s (much larger) consumer base to subscribe to Game Pass.

It seems improbable for Game Pass to appear on Sony consoles anytime soon. Microsoft doesn’t need PlayStation to make Game Pass a success – publishing more AAA games for the service would likely be the best bet to increase subscriber count, and it will take many years for Game Pass to become more ubiquitous in the streaming realm. If Game Pass ever appears on PlayStation, it would not be for many years. Even then, Sony is often reluctant to partner with competitors. This deal could result in a significant loss of sales revenue by offering another platform for gamers to get their games from.

Microsoft is likely looking ahead to the impending console-less future and currently looks in excellent condition to push gaming in that direction whether Sony is willing or not. PlayStation hasn’t begun to bleed yet and will likely continue to reign supreme in sales for this console generation, but we are witnessing a division in trajectories. Sony is rumored to be showing up late with a subscription service of its own but lacks the spending power to acquire content for the platform. Microsoft is focused on a subscription model and streaming-based future – and it has already released praiseworthy early versions of each.

Sony seems to be doubling down on hardware by developing the PSVR2, slated for release later this year. Attempting to move on to the next “big thing” in videogame hardware with VR headsets makes a lot of sense for one of the preeminent consumer electronics companies. While Microsoft has tinkered in many hardware fields, its largest success in recent years has been the Azure cloud computing system. We may be witnessing the beginning of the end of competition between the two consoles as Xbox transitions to the cloud. The path to long-term success is more straightforward for Xbox; we’ve already witnessed compelling versions of a streaming Game Pass future.

Whether PlayStation has staying power beyond as a videogame publisher relies on the future of virtual reality and whether a significant number of consumers adopt the platform. Cloud computing reaching performance equal to high-end PCs and consoles would likely be the end of new gaming hardware. VR headsets are an exception and could eventually be more analogous to a television or monitor. Either way, I would wager on VR headsets dominating the video game hardware market by 2030.

Facebook kicked off a new wave of virtual reality buzz with its recent name change in October 2021 to Meta – as in the metaverse, a 3D virtual world originated from Neal Stephenson’s excellent novel Snow Crash. The name change signaled a shift away from the beleaguered social media platform and towards a new emergent business where Meta could use its cash hoard and early acquisition of Oculus to become the dominant player. Meta backed up their name with significant investments into VR research and development towards a virtual world (or store) that can connect the world over games, work, and NFT art.

Trends for VR and virtual reality reached their highest level in four years in the past couple of months (best all-time, short of the trailer release for Ready Player One in December 2017). Search volume for the Oculus Quest surpassed that of hotly sought consoles PS5 and Xbox. VR headsets reportedly sold in large amounts this past holiday season in another annual increase for the segment. Meta almost doubled its sales of Oculus VR headsets from 2020 from 3.5 million units to nearly 7 million units. Since Christmas, daily active users of Oculus have been up by 90% as VR app developers have been enjoying an incredible recent surge in demand for their products.

All of this adds up to Meta as the dominant early VR hardware developer – the company has the best selling VR headset in the Oculus Quest 2 and billions of cash available to spend and the intention to do so -- what can be more intent than its changed name in a nod towards the virtual future? Owning the VR headset market share won’t encompass all the money to be made in VR in the future, but it will likely be one of the most profitable positions. Consider Apple and Google, the two most dominant smartphone players. Would you rather be an app on their platform? Or would you rather be the entire ecosystem able to enforce a 30% revenue share from all purchases made in the metaverse? Software developers will make many billions in the VR industry, but no one stands to have the most dominant position than the one that can win the headset war.

It appears likely that we are in the nascent stage of VR hardware, similar to the early 2000s era of cell phones. Nokia was early to the mobile phone market and subsequently controlled 40% of the mobile market share by the 2007 release of the iPhone. Since that time, iOS and Android have eaten up all of the market formerly held by Nokia, Sony Ericsson, Blackberry, LG, and Motorola. The two combine to hold nearly 100% of the global mobile operating system market. A similar consolidation in the VR space isn’t inevitable but seems probable – the competitors vying for the top spot have all the resources to gain monopolistic power in the field by buying out start-ups and competitors and branching out to other business models.

For instance, we currently have a few potential different case models for the various VR hardware coming down the pipeline. The newly announced PSVR2 is entirely for gamers, with most likely little in the way of other uses, while the Quest 2 is at least partially becoming a hub for productivity applications such as workspace apps (like Immersed). I would guess the much-rumored Apple VR headset will have a more creative bent about creating digital art and perhaps even social hubs for congregating. Current rumors and second-hand sources have recently stated Apple is focusing on shorter-term usage than the always-on metaverse, as well as a price point in thousands – all of which adds up to a bent on creatives and professionals.

It makes sense for companies to focus on different use cases while the virtual market is in the early stages. It does not seem to make sense for the developer of a well-selling headset to not grow its market share by incorporating what works for the other headsets. VR headsets seem to have uses that should be largely redundant over time and focused on the same quality improvements like resolution and technical power. There may be more competitors in the VR headset market than in the duopoly between iOS and Android, but expect a couple to reign supreme and dominate the market through the same anti-competitive practices that Apple and Google have employed to get to their throne.

Currently, the list of potential winners of the headset war appears to be pretty short. Only Meta, Apple, Valve, HTC, and Sony seem to be in the game after Google seemingly dropped out after the failure of its Daydream headset. Apple is the only member of that group that hasn’t released anything, but rumors abound about a potential headset out as early as this year. Meta, HTC, and Sony are the top three competitors by a large margin (DPVR and Pico round out the top five), while Valve may have given up on its VR ambitions.

I wouldn’t count anyone out, even (especially?) Google, but it does seem like Meta, Apple, and Sony may be the elite long-term bets in the market. The money that Meta and Apple have in particular should give them a strong position in research and development, and for anything they can’t do themselves should be enough to acquire almost any company, and certainly any start-ups in the space. Meta is already trying to corner the VR market by buying up several app developers of successes on its Oculus App Store – the FTC launched a probe of Meta’s most recent purchase of Within.

“Meta’s first five VR app acquisitions went through without a hitch because they were too small to trigger a cursory review by U.S. anti-trust regulators. But those regulators are slowing down the $400 million-plus Supernatural deal, according to two people with knowledge of the situation. Shortly after Thanksgiving, the Federal Trade Commission opened an in-depth probe of the acquisition, meaning Meta may not be able to finalize the acquisition for another year, assuming the agency doesn’t formally challenge the deal in court, causing additional delays.”

Sony has about 16% of the market cap of Meta, but I include it because of its strong consumer electronics background and apparent moat in entertainment consoles. Of course, Apple has roughly the market cap of Sony in cash, and Facebook is not entirely far off either. Still, it is doubtful that an acquisition of that size could pass through anti-trust legislation in either Japan or America regardless of the current landscape of poor enforcement. In Sony’s corner, the company recently unveiled its PSVR2, the long-awaited sequel to the best-selling VR headset, until the Quest 2 surpassed it in 2021. The PSVR2 appears to be the most feature-rich headset so far and is likely to be the most affordable high-end headset – for PS5 users at least. Including the cost of the PS5, which is required for VR use unlike the Quest 2, makes the PSVR2 a much pricier option for consumers. The demand for the PS5 is currently robust, but due to supply shortages, the console is still only in around 14 million households. That is a potential limiting factor in the number of PSVR2 headsets that can be sold that other headsets do not hold.

I would bet on Sony competing on the best hardware, but likely to lack software support for the headset compared to its competitors. Sony has never been particularly a software company, and tying the headset operating system to the PS5 may not be competitive to a ground-up approach to VR. Meta has been in the game longest with Oculus and has a solid chance at the complete hardware and software package, but I also wouldn’t feel very comfortable betting on its metaverse integration. Meta hasn’t had many successful product launches in a long time, and they may not be able to compete in the long run with the developers at Sony and Apple. Sony and Apple have successful histories of integrated hardware and software with their devices, although I doubt anyone buys a PlayStation because of the operating system.

As for Apple’s case, well… it’s the most valuable company in the world with a $3 trillion market cap. And, they’ve been in this position before – the slow roll, attempting a product that can push a decent product to great. Like the mobile touchscreen, Apple wasn’t the first to market but rather the first to develop the minimum acceptable version able to convince a large crowd of its advantages. I think an Apple VR/AR headset could very well achieve similar success – the company certainly has the software and hardware chops to make it happen. However, the expected focus on high-end luxury experiences and creative development likely means a mass-market Apple headset is still quite a way off. The reports that Apple is focusing on “bursts of gaming, communication, and content consumption” rather than a metaverse is encouraging for my usage, but also lacks the strong growth messaging of a platform like Meta, which appears to intend to become a gatekeeper to the virtual reality ecosystem.

I didn’t cover augmented reality glasses such as Microsoft’s HoloLens mostly because it currently seems like there may be an opportunity for both a fledging AR and VR market. AR seems to have more productive real-world uses, while VR has a leg up in entertainment and computer workspaces. One may overtake the other, in terms of one headset or glasses interchangeably switching from AR to VR, but they also have such different physical functions that we may always prefer the immersive experience of VR for entertainment.

Virtual reality is here for a while. How long is that? Unknown. Although, with consumers’ love of screens and the lack of other excitable options to replace them, it seems plausible that VR will continue until the release of a Neuralink-esque brain-machine interface that could project images directly into your visual field. VR may never be as significant a change as the smartphone -- nearly every American not only carries a smartphone, but they are also crucial to everyday living. Still, the platform’s popularity will grow in the videogame and computing workspace industries as resolution and computing power increase over the next few years.

Letters of recommendation have become de facto required by most graduate programs in the United States. At least two, but most commonly three, letters are almost always yet another obstacle for students that feel increasingly pressured to gain post-baccalaureate degrees in the ever-intensifying educational rat race. Reference letters place an undue burden on their writers, cause anxiety for those requiring them, discriminate against workers, and are fraught with an implicit bias of gendered and racial language.

Berkley’s website explains that its required three letters “are a very important part of the application process” and should preferably be requested from a professor. Generally, many programs want at least one reference letter from a former professor but may loosen standards to accept letters from supervisors from those that have been out of academia for a bit.

Personally, when I applied for my MS several years ago, I had to ask three professors for recommendation letters. It was vastly easy at the time. I was applying for graduate school straight out of undergrad and had a lot of access to professors who had working relationships with the faculty members that would decide my fate. I was pretty shy and did not welcome the idea of having to ask anyone for such an ordeal as writing a paper on my positive attributes. Still, I overcame my reticence eventually when a professor encouraged me to apply to the program. I have no doubts that the idea of asking for recommendations unnecessarily hurt the quiet students. I would not have attended graduate school without that professor’s guidance.

Not everyone has a professor-mentor like I had. Certainly not at the large state schools where professors routinely find themselves teaching hundreds to thousands of students every semester. I was a bright but lazy student with a decent GPA lost in a wave of hundreds of other students in my degree path – what made me think I was “special” enough to go on to become one of the 15 graduate students for the graduate program?

Today, I find myself once again looking at graduate degrees to further my education. This time I am now several years graduated from college with limited options of professors for whom to ask for a reference. I still work in academia, so trust me when I say I am better off in this respect than most, but I still find the practice both antiquated and exclusionary. Most of the professors I was close with have moved on, retired, or most likely forgotten I existed.

Supervisors are an option – I am well-regarded by the faculty above me – but would require both an admission that I am looking to pursue another degree and that I could be pursuing fields and opportunities beyond my current career (which could hurt my immediate career prospects). I work in academia; I feel for those that work for private employers that may not grasp the importance of helping an employee achieve further education that could either cause the employer to have to pay a higher wage or receive less work due to academic demands.

It shouldn’t surprise that recommendation letters serve as a gatekeeping utility – that is clearly the design. They originated within academia in the early 20th century at Harvard, Yale, and Princeton to limit the admission of marginalized groups. Jerome Karabel’s The Chosen details the origin of a meeting between deans of the aforementioned universities in 1918. A growing percentage of incoming students were East European Jewish immigrants; as one Harvard official put it, “the disinclination, whether justified or not, on the part of non-Jewish students to be thrown into contact with so large a proportion of Jewish undergraduates.” A series of detailed guidelines were formulated to measure potential incoming students beyond mere academic ability but also factoring in nebulous measures of character – recommendation letters were one of these character measures.

Still to this day, recommendation letters reaffirm entrenched systems of bias and inequality. Many studies have shown that letters written for men are more appealing to graduate committees than those written for women: men are routinely referenced as analytical while women are nurturing, which is not much of a selling point to graduate committees aiming for analytical candidates. The gender disparity is so well known that many institutions have installed guidelines to avoid bias in reference letters, albeit to little to no avail.

Racial bias in recommendation letters is no different. Studies show that admissions counselors are more responsive to prospective black students that present as apolitical rather than activist. Letters of reference for Black applicants typically have many phrases that may bias readers. Many programs warn that marginalized groups may have shorter reference letters and fewer accomplishments listed. For some reason, colleges believe that admissions can parse the difference between a biased letter rather than the proper solution of abandoning recommendation letters altogether.

An example of guidance from Montana State University reads as “letters of reference for POC can be considerably shorter and at times do not highlight publications or research quality, compared to letters for white scholars. Make sure you highlight critical research accomplishments of POC scholars in every letter!” and “In addition to being shorter, letters for POC are less likely to give ringing endorsements and only include minimal assurance (they can do the job’) or veiled praise (‘surprisingly sharp’) rather than a ringing endorsement (‘they are the best for the job’).” It is simply asking too much for both the writers and readers of references to avoid implicit bias – especially because the linguistic bias can be very minute and potentially tricky to overlook subconsciously. The best-case scenario is that you have marginalized prospective students achieve admittance by either lying or simply ditching their cultural and political leanings to appeal to admissions; similar to what legal scholars Carbado and Gulati found that most screeners prefer:

“good blacks” [who] will think of themselves as people first and black people second (or third or fourth); they will neither “play the race card” nor generate racial antagonism or tensions in the workplace; they will not let white people feel guilty about being white; and they will work hard to assimilate themselves into the firm’s culture. The screening of African Americans along these lines enables the employer to extract a diversity profit from its African American employees without incurring the cost of racial salience. The employer’s investment strategy is to hire enough African Americans to obtain a diversity benefit without incurring the institutional costs of managing racial salience. -Carbado, Devon W., Gulati, Mitu. 2013. Acting White? Rethinking Race in Post-racial America. New York: Oxford University Press.

It would be one thing if recommendation letters worked. They don’t. In fact, the average validity for references to job performance is only .13. That systematic review found the low validity resulted from leniency on behalf of the recommendation writer, insufficient knowledge of the applicant,  and low reliability (references from two different professors for one applicant are often wildly inconsistent). A more recent meta-analysis of graduate-level references showed that a statistical model meant to predict GPA in graduate school was only improved by 1% with the inclusion of reference letters. Graduation rate prediction was increased by 6% by including references, which the authors admittedly thought was cause for some promise. Still, the authors’ recommendation of reference letters wasn’t glowing:

“Despite this troubling evidence, the letter of recommendation is not only frequently used; it is consistently evaluated as being nearly as important as test scores and prior grades (Bonifazi, Crespy, & Reiker, 1997; Hines, 1986). There is a clear and gross imbalance between the importance placed on letters and the research that has actually documented their efficacy. The scope of this problem is considerable when we consider that there is a very large literature, including a number of reviews and meta-analyses on standardized tests and no such research on letters. Put another way, if letters were a new psychological test they would not come close to meeting minimum professional criteria (i.e., Standards) for use in decision making (AERA, APA, & NCME, 1999).” - Kuncel, Nathan R.; Kochevar, Rachael J.; Ones, Deniz S. (2014). A Meta-analysis of Letters of Recommendation in College and Graduate Admissions: Reasons for hope. International Journal of Selection and Assessment, 22(1), 101–107. doi:10.1111/ijsa.12060

So, we have an antiquated gate erected with the express intent to exclude marginalized groups, and that to this day continues to bar intelligent prospective students that come from disadvantaged backgrounds. First-generation college students, low-income, Black, female… the list goes on of groups that have been studied and shown to suffer from the current recommendation process. To top it off, by excluding so many qualified candidates and emphasizing the importance of a more easily attainable requirement by well-connected students regardless of intelligence, the practice is almost entirely devoid of any real predictive measure of future success – the exact purported role of recommendation letters. It is time to ditch antiquated systems that perpetuate classism, and the lack of usefulness on the part of recommendation letters should make that action all the easier to accomplish.

That is the single line that I kept reflecting on throughout my reading of Infinite Jest. A very long novel that I have picked up and given up on numerous times over the past several years. I always wanted to read and finish Infinite Jest, which is already a somewhat embarrassing idea to admit. That you wish you could complete a book that didn't grab your interest may say more about your false attempts at grandiosity and shows of intelligence than actual enjoyment derived from the book.

It is hard to remember when I first heard of David Foster Wallace, but around my early college years, I became enamored with reading quintessential modern classics, or recent works that had received much acclaim. More honestly, I became enamored with the appearance of reading the aforementioned classics. DFW thankfully wrote many essays during his life, and I was able to quench my thirst for high-brow literature through his short non-fiction pieces and still feel like a brainiac. His trademark bandana style made him the all-time coolest in terms of literary assholes that had managed to grasp the lofty expectations placed on them.

I can actually make it even more embarrassing. I, on at least two occasions, lied by telling people that I had not only read Infinite Jest but went as far as saying I "loved" the novel! One of the instances was actually a feeble attempt at impressing someone. Until, naturally, I was asked what the book was about. At the time, I had read about 100 pages of the over 1000-page tomb several years past, and even at the time I was left with more "what the fuck is this" rather than any insight if what I read was good, bad, or interesting. It was simply a long book with a lot of praise written by a troubled man that I could list on my intellectual resume. Damn right, those 100 pages were listed on my resume, but how was I to say I loved the first 100 pages of a book?

So I stammered and said it was about addiction. Notably, only really recapping a very brief portion of the book that features a man waiting for a drug dealer. Ken Erdedy is in a cycle of addiction, desperately wanting to stop smoking marijuana. He has to buy new paraphernalia each time he smokes, as he goes on weekend-long binges and then throws everything away afterward. Ken doesn't even enjoy smoking any longer, primarily due to his craving to consume an entire 200g of marijuana, or as Ken estimates about 200-300 bong hits per day before the weekend ends and he has to go back to working life. Ken's story ends with him torn with indecision between answering a phone from a colleague and answering the door for the presumable drug dealer.

Beyond that, I had no clue what the book was about. And that short riff only took up about 8 pages in Infinite Jest, only for Ken to never show up again. Obviously, the joke was on me as I was limited to a defense that the book was "very dense" (or something similarly pretentious). Honestly, consider the brief synopsis to follow as an exercise to store this into memory.

Even when I finally returned to finish the novel a few months ago, there was no Hal Incandenza, the story's main protagonist, in my recollection. Until re-reading the first tenth of the book, I forgot about the titular videotape that is so damn good it causes viewers to feel so emotionally connected to it that they fail to want for anything else and continue to waste away sitting in front of the film.

Hal's father, James Incandenza, was an avant-garde filmmaker/director of a tennis academy that took his life via microwave oven before most of the book. James Incandenza created many films that were neither critically nor commercially successful, and his biography is entirely contained in the novel's footnotes. Here's one of my favorite examples:

"The Joke" - B.S. Latrodectus Mactans Productions. Audience as reflected cast; 35 mm x 2 cameras; variable-length; black and white; silent. Parody of Hollis Frampton's 'audience-specific events,' two Ikegami EC-35 video cameras in the theater record the 'film's audience and project the resultant raster onto screen - the theater audience watching itself watch itself get the obvious 'joke' and become increasingly self-conscious and uncomfortable and hostile supposedly comprises the film's involuted 'anti-narrative flow. Incadenza'a first truly controversial project, Film & Kartridge Kultcher's Sperber credited it with 'unwittingly sounding the death-knell of post-poststructural film in terms of sheer annoyance.' NON-RECORDED MAGNETIC VIDEO SCREENABLE IN THEATER VENUE ONLY, NOW UNRELEASED

James Incandenza also directed the aforementioned eponymous film called Infinite Jest, labeled by most only as "the Entertainment" and never released for consumption. That MacGuffin – one of a movie creating a physical dependency of its viewers, drives the main narrative and serves as the closest semblance of resolution the reader can hope to glean from the sprawling work of fiction.

In DFW's novel, the President of the U.S. is a presciently written character similar to Donald Trump, only if he possibly had a room full of advisors just like himself. President Johnny Gentle strikes a deal with Canada to become President of a more prominent Organization of North American Nations (O.N.A.N.), but only if Canada accepts a portion of the Northwest U.S. that has become toxic from heavy pollution. A rogue group of Canadians (Quebecois Separatists) learn of the film Infinite Jest and plan to use it to infect the U.S. to gain revenge and independence. The Canadian terrorists, or Assassins Fateuils Rolents (wheelchair assassins), all lost their legs in a La Culte du Prochain Train – a game in which four Canadians wait, standing before a train track and attempt to win by jumping to the other side of the track as close as possible before the oncoming train passes.

The Assassins Fateuils Rolents attempt to infiltrate the Incandenza family to find a copy of Infinite Jest. In the aftermath of the patriarch filmmaker's death, they are left to investigate his three sons and widowed wife: Hal, his brothers Mario and Orin, and his mother, Avril. Like Catch-22, which I was frequently reminded of while reading with similar humor, writing, and narrative style -- this book shines with strange characters. The depth that 1000 pages allow for DFW to explore a range from hilarious hysterics to valleys of despair in a very natural manner – the characters are all incredibly exaggerated but always remain true.

Take Orin Incandenza for instance, oldest Incandenza brother. After a successful youth tennis career that he parlayed into a Boston University scholarship offer, he renounced the sport and walked on as a punter for B.U. He ends up becoming the best punter in the history of the N.F.L. and develops an unhealthy sex addiction in which he cannot receive any pleasure and views the women he sleeps with as "subjects." He becomes increasingly close to the main narrative as the novel continues, notably near the end of the book. Throughout, he appears deeply dishonest but also familial and (to some degree) considerate. It felt entirely earned when I grasped Orin's prominent role in the inner workings of the narrative in the last few pages.

A separate main saga intertwines the Incandenza and Canadian Separatist tales about Don Gately, a former drug addict that staffs a halfway house. This storyline probably confuses some – I was confused – but absolutely congeals itself in the end with the connection between Orin and the P.G.O.A.T. (prettiest girl of all time), who conceals her beauty with a veil. The sections on Gately, drugs, addiction, and recovery take on bounds of weight with the knowledge of how DFW passed, hanging himself from a rafter after a year without taking his anti-depressants, along with years of use of marijuana and other drugs.

DFW writes a lot about drugs throughout the novel, including many encyclopedic footnotes on various recreational drugs. Drug use and recovery play essential roles in both DFW's life and nearly every character in Infinite Jest. In 1989, DFW spent time in a hospital after a suicide attempt following years of alcohol and marijuana addiction (his terms) and then spent time at Granada House, a halfway house for addicts. The access to the interior lives of recovering addicts gives the Gately sections a notable feel of authenticity. The location, residents, and halfway house rules such as forgoing to a higher power and a requirement to find low-level work are derived from the time he spent at Granada House. Even Don Gately himself was drafted after a Granada House supervisor.

"At the end of 1989, David Foster Wallace was admitted to McLean Hospital, the psychiatric hospital associated with Harvard University, for substance addiction. He was twenty-seven years old and increasingly desperate for help. He had already experienced literary fame with his college novel, "The Broom of the System," and sunk into obscurity with his postmodern short-story cabinet of wonders, "Girl with Curious Hair" (twenty-two hundred copies sold in hardcover). His most recent stop, as a graduate student in philosophy at Harvard, had lasted only a few weeks. His private life was hardly less uneven. He had attempted suicide the year before, in his family home, and had also gone from being a marijuana addict to an alcoholic, mostly drinking alone and in front of the television. Most dreadfully, he felt that he could no longer write well. He was unsure whether the problem was lack of focus, lack of material, or a lack of ambition. Granada House was to be the improbable solution to this problem, altering his approach to his work and putting him on the road to producing, in remarkably short order, his masterpiece, "Infinite Jest."

Between all the main narratives (there are many other side-narratives), the only one that does not seem overly self-referential is that of the tape Infinite Jest and O.N.A.N. politics which, for the most part, seem to mostly aid in pushing the narrative forward and magnify the larger points on creative work and drug use (even Infinite Jest the tape acts as a drug). The Tennis Academy and Halfway house storylines feel personal and raw in hindsight, but I wonder if readers were able to grasp the role tennis and drugs played in DFW's life when Infinite Jest was released in 1996. The authenticity of DFW shines through every page and really might be the single most crucial factor for the success the novel had on me personally.

DFW was a great satirist and possibly a really shitty human being. Credible accusations came out after he passed related to stalking and abusing author Mary Karr, charges that have been corroborated by DFW's biographer. I haven't read his biography yet, but Mary Karr's retelling is bad enough. Infinite Jest and DFW already have a poor reputation as favorites of misogynistic younger men. I can't speak on DFW, but Infinite Jest does have some misogyny. The two main female characters, Avril Incandanza and Joelle Van Dyne, are written through the lens of male characters and have very stereotypical negative female characterizations. I wouldn't say they're the most misogynistically written female characters (probably no worse than Stephen King) and DFW does have an "out" here, as it could easily be read that the characters within the novel are all flawed, and many sexist. Notably, Joelle has many redeeming moments, but of a book with nearly entirely male characters, they were by far the weakest, with little reflection for either beyond their impact on the males.

Infinite Jest has a problem with gender and sex and is a male-centered story. It's a bit racist as well (holy shit, the awful Black dialogue). I do disagree with the detractors on whether that makes the novel bad, while at the same time acknowledging that women do not largely enjoy the novel for good reasons. As a whole, I thought Infinite Jest was a great read. The vocabulary is incredibly diverse, the experiences at times painfully self-referential, and the humor is second to only maybe Catch-22 -- I believe this is one of the funniest novels of all time. The characters of Infinite Jest are incredibly flawed, just like their progenitor. And like that progenitor, they predominantly suffer from drug addiction and mental illness. You may not like Infinite Jest, but there is a lot to learn from that amount of satirized introspection.

Facebook has a new name and a new purpose. Can they achieve the virtual metaverse? Will VR be the end of Meta?

On October 29, Mark Zuckerberg announced the rebranding of Facebook, the company, to Meta. The social media network will retain the name Facebook, but the parent company will change its name to distance itself from a toxic brand and potentially shift the company to a more virtual reality-focused future. Short for metaverse, a term coined from the Neal Stephenson book Snow Crash, Meta has ambitions beyond social media and into a future digitized world.

Facebook has had a run of negative news for the past month year decade. Just recently, the whistleblower accusations (covered by me, here) of Facebook management knowing of the detrimental effects of the application on youth mental health have been at the forefront of the media coverage. The company also had a several hour-long blackout and poor earnings guidance that led the stock to decline by almost 8% as of today since last Thursday.

Meta’s third-quarter earnings weren’t terrible, not bad enough for such a poor reaction from the market. It beat estimated per-share earnings by 1.32% but missed on revenue by -1.74%. The miss on revenue stung, but Facebook still exhibited a positive revenue trend growing year over year. The market is fearful of inflation and, in particular, an overbought stock market. Like most of the tech sector, overbought companies should expect fairly immediate stock pullbacks from revenue misses, as many currently trade far into future earnings.

Still, the revenue miss was hardly the worst of Facebook’s earnings call. During the call, the company detailed recent Apple advertising changes as the “largest factor in terms of Q3 headwinds.” CFO David Wehner said that without the new user opt-in on Apple devices, the company expected sequential growth in revenues. Facebook’s earnings mirrored Snap’s from the prior week when Snap reported lower forward guidance on revenue due to Apple’s advertising opt-in policy. Snap immediately plummeted by 20% and currently sits 27% off from before its earnings call.

“Our outlook reflects the significant uncertainty we face in the fourth quarter in light of continued headwinds from Apple’s iOS 14 changes, and macroeconomic and COVID-related factors. In addition, we expect non-ads revenue to be down year-over-year in the fourth quarter as we lap the strong launch of Quest 2 during last year’s holiday shopping season.” - Meta

As a reminder, Apple began prompting users beginning with iOS 14.5 to ask if they would like to opt-in to an applications advertising tracking. The policy went into effect on April 26, 2021, and essentially prevented applications from tracking user activity across different applications (i.e., Facebook could no longer track your purchases through the Amazon app). Since going into effect, the policy immediately resulted in a US consumer opt-in rate of merely 4% and a worldwide opt-in rate of 11%. The Apple advertising opt-in prompt is not going away and represents a definite speed bump that digital advertisers will have to traverse. Still, there are some positive signs that the opt-in rate is increasing as advertisers add functionality to user tracking.

Meta generates nearly all of its revenue from advertising; any loss of marketers or spending by marketers would seriously harm its business. Meta relies on the advertising revenue generated from targeting and measurement tools that incorporate data from users on websites and applications that Facebook has no control over.

“For example, in April 2021, Apple made certain changes to its products and data use policies in connection with changes to its iOS 14 operating system that reduce our and other iOS developers’ ability to target and measure advertising, which to some extent has negatively impacted, and we expect will continue to negatively impact, the size of the budgets marketers are willing to commit to us and other advertising platforms. In addition, we have implemented, and may continue to implement, product changes that give users the ability to limit our use of such data signals to improve ads and other experiences on our products and services, including our Off-Facebook Activity tool and our worldwide offering of certain product changes we implemented in connection with the GDPR. These developments have limited our ability to target and measure the effectiveness of ads on our platform and negatively impacted our advertising revenue. For example, our advertising revenue in the third quarter of 2021 was negatively impacted by marketer reaction to targeting and measurement challenges associated with iOS changes. If we are unable to mitigate these developments as they take further effect in the future, our targeting and measurement capabilities will be materially and adversely affected, which would in turn significantly impact our future advertising revenue growth.” - Meta

While significant, I do not think the Apple advertising changes are exceptionally substantial for Meta in a manner that will adversely impact the company much going forward. For one, Apple is the only platform instituting such a change, and two, opt-in rates should increase as tracking functionality increases for the consumer. This change seems like a short-term problem, although any regulation that could create a similar effect at the federal level would likely significantly curb Meta's growth.

Two other problems mentioned during the earnings call are potentially much more worrying for the future long-term growth of the company. First, the company acknowledged some issues the platform has with acquiring younger users. Second, Facebook seems to be betting big on the metaverse and virtual reality for the future.

Regarding attracting younger users, this has been an issue for Facebook’s namesake social media platform for a while. Facebook bought Instagram for this exact reason: to corner the youth demographic because, at present, Facebook is the only social media site in the top six most frequented in America where Gen Z not only does not rank first in polled usage but ranks below millennials and boomers. Facebook is still one of the most dominant social mediums for those ages 18-29, only 2nd to Instagram, but Facebook has issues recently keeping the youth demographic.

Earlier in 2021, a researcher at Facebook shared some alarming statistics of youth social media platform usage. Teenage Facebook users in the US have declined by 13% since 2019 and are projected to drop an additional 45% over the next two years. Adults between 20 and 30 years old were expected to decline by 4% over two years. The researcher also noticed that the younger a Facebook user was, the less they regularly engaged with the app.

“The “aging up issue is real,” the researcher wrote in an internal memo. They predicted that, if “increasingly fewer teens are choosing Facebook as they grow older,” the company would face a more “severe” decline in young users than it already projected.”

Facebook seems to be acknowledging its issues attracting younger users and is trying to stop the bleeding. According to a Facebook internal message, account registrations from March 20-21 for users under 18 were down 26 percent from the prior year. Those teens already on Facebook are engaging less than ever before.

“Most young adults perceive Facebook as a place for people in their 40s and 50s,” according to the presentation. “Young adults perceive content as boring, misleading, and negative. They often have to get past irrelevant content to get to what matters.” It added that they “have a wide range of negative associations with Facebook including privacy concerns, impact to their wellbeing, along with low awareness of relevant services.”

Losing Generation Z and younger is an existential threat to Facebook’s advertising model. Facebook plans to initiate multiple new products both across the namesake platform and Instagram to attract more youth and make the platforms more appealable from a mental health perspective. Time will tell, but the “ageification” of Facebook has had notably deleterious effects on society already, and the Facebook platform may be too late to change in a meaningful way that could attract a younger audience. Focusing on Instagram and a new social media app offering may be wiser for preserving the brand’s long-term viability.

Finally, Meta has been speaking more than ever about the future of its virtual and augmented reality products. With the change in the company name to Meta, it is clear that Zuckerberg sees the virtual metaverse as the next chapter in the social media landscape. There are quite a few projections that consider the current VR market is in its nascent stages and predict a boom in VR and AR market size over the next few years. Meta could be pouncing on the next big thing right before takeoff, with synergy between its own virtual reality headset offering in Oculus.

“Think about how many physical things you have today that could just be holograms in the future. Your TV, your perfect work setup with multiple monitors, your board games and more — instead of physical things assembled in factories, they’ll be holograms designed by creators around the world.

You’ll move across these experiences on different devices — augmented reality glasses to stay present in the physical world, virtual reality to be fully immersed, and phones and computers to jump in from existing platforms. This isn’t about spending more time on screens; it’s about making the time we already spend better.”

Still, a shift in product offering should represent a significant risk for the company. It makes sense to be early to the virtual scene to extend your social media empire, but when has Facebook ever attempted a large new product without it failing? Instagram and WhatsApp were acquired. Slingshot, Lasso, the Facebook Phone, pokes, Places… all dead.

Zuckerberg and Facebook programmers built the premier early social media site, but they have rarely succeeded in new product offerings since then. Now, they have to design a social media website that is fun and offers real-world utility. Virtual concerts, trips, and artwork may be “fun” for some, but it is hard to see the platform driving adoption without the real-world utility. Meta seems to understand that issue and is trying to brand the VR platform as a new way to work and stay connected remotely. Personally, the early demonstration of Meta's work meeting software seemed erroneous and not very conducive to an actual workplace. Early reviews of the meeting software have mainly been negative.

Color me skeptical that a company with the business model and drive to sell advertising and hasn’t made a significant popular addition in many years can get the metaverse off the ground. Meta is all in on virtual reality with $10 billion in spending on the metaverse this year and expects to spend more for the next several years. That is a lot of research and development spending that has to overcome the fact that the VR market is still largely inaccessible, requiring pricey upfront investments, and the adoption rate currently is still relatively low.

The metaverse also seems to ignore the cries of harmful effects of Facebook on youth mental health. I am unsure if Facebook can overcome the adverse health outcomes that seem ingrained in social media. Facebook believes the platform simply mirrors real life and that issues that plague the service are not due to the service. There is some truth in that statement, but they should acknowledge that Facebook metastasizes real-world problems. What can we expect in a virtual metaverse built around social engagement if social media is already unsafe? We already know that research indicates virtual abuse is “far more traumatic than in other digital worlds.” My wife played Rec Room once on PSVR and cried. Virtual reality has a lot of positive test cases, but social media built by an advertising empire may not be the way to get there.

Meta is one of the best-performing stocks on the entire US market with a decent discount rate compared to the other FAANG (now, MAANG) stocks. It appears strong for the short to medium term, but the investments in virtual reality may need to pan out for Meta to stick as one of the premier tech companies in the distant future. It probably is a worrying sign for Meta that its genius Chief Technology Officer of Oculus John Carmack has already voiced concerns of the recent rebrand.

"I really do care about [the metaverse], and I buy into the vision, I have been pretty actively arguing against every single metaverse effort that we have tried to spin up internally in the company from even pre-acquisition times... I have pretty good reasons to believe that setting out to build the metaverse is not actually the best way to wind up with the metaverse. The most obvious path to the metaverse is that you have one single universal app, something like Roblox. I doubt a single application will get to that level of taking over everything. I just don't believe that one player—one company—winds up making all the right decisions for this. Mark Zuckerberg has decided that now is the time to build the metaverse, so enormous wheels are turning and resources are flowing and the effort is definitely going to be made." - John Carmack

Can the citizens of the United States keep paying exorbitant costs for the pharmaceutical industry?

Dylan Scott, a health policy reporter over at Vox, has a meandering article out titled “Can the U.S. cut drug prices without sacrificing new cures?” In the article, Scott writes that the policy of the Democratic’s Build Back Better reconciliation bill of setting a hard cap on the cost that Medicare will pay for certain drugs needs to be balanced with the potential consequences of decreased innovation in the pharmaceutical sector. His main point is from the Congressional Budget Office report from 2019 that estimated a likely decline in revenue of approximately 20% for pharmaceutical companies if the hard Medicare cap.

“So who is right? It’s a question academics and analysts have been trying to answer for years. The U.S. is the biggest pharmaceutical market globally, representing 60 percent or more of the industry’s global profits. Nobody can say for sure what would happen if the world’s largest prescription drug market — by far — suddenly instituted government price controls. The Congressional Budget Office estimated in 2019 that international revenue from new drugs could drop by as much as 20 percent.

Many analysts agree this means that the industry would spend less on research and development, fewer drugs would be approved, and those losses would increase over time. However, estimates range wildly because there is so much uncertainty in the drug development process.”

Total spending on medications rose to $539 billion in the United States for 2020 for a total increase of almost 71% over the past decade for U.S. consumers. Americans spend about three times as much on medications as Europeans and 90% more as a percentage of income. The United States pharmaceutical market accounts for 64-78% of worldwide pharma profits. Hilariously, the report that Scott cites from the University of Southern California recommends that Europeans should actually pay 20% more for medications to increase the amount of innovation in the pharmaceutical sector instead of concluding that Americans should be spending less.

If the hard cap survives the reconciliation process, Medicare will pay no more than 120% of other wealthy countries’ average cost. So, Americans will still pay more than every other country for life-saving medication, but significantly less than the current norm. The CBO estimated that this cap would result in a 15-25% decline in revenue for the entire pharmaceutical sector and a subsequent decline in innovation in the range of .5-8% of new drugs on the market. In other words, that in the next decade, two fewer drugs will come to market and potentially 30 fewer drugs the following decade. For reference, the CBO expects the FDA to approve about 300 new medications within the next decade without the Medicare cap.

Innovation is important. It leads to jobs, economic growth, and lower rates of poverty. In the pharmaceutical sector, it can lead to life-saving or life-enhancing medications, so certainly, we do want to consider any drastic decline in the number of novel drugs coming to market. The problem is that Americans cannot afford the medications as is, and certainly should not be expected to serve as funders for the world’s medicine. The Vox article is terribly one-sided against price controls, going as far as to include a Rand Corporation research paper that says Americans and Europeans would lose .7 years of life expectancy by 2060 due to lack of innovation in the sector. The actual wording used in the article is blasphemous when you factor in the difficulties in assessing innovation within a vacuum over 40 years, but even more so when libertarians are writing the assessment while opposed explicitly to any price controls in their crusade for individual liberty.

“But RAND analysts tried to do that in 2008 and found that with drug price controls, life expectancy would drop over 50 years unless innovation were somehow not tied to pharma revenue, which the authors considered unlikely. By 2060, that projected decline in life expectancy for both Americans and Europeans would reach approximately 0.7 years.”

Of course, nowhere in the Vox article does Scott mention that the United States has much lower life expectancy than every comparable country. Americans spend an incredible amount more on healthcare than any other country globally and have a life expectancy significantly shorter than every other rich country. At best, I would recommend Scott to reframe his article as, “Can Europeans afford a decline in novel drug innovation funded by Americans?” because, as it currently stands, Americans are already not receiving the benefits of a profit-focused healthcare system. Our life expectancy in the United States is as close to Saudi Arabia and Iran as it is to Germany and France. With a life expectancy of about 78.9 years, we fall short of France and Germany’s 81-83 years of life expectancy while paying twice as much in health costs per capita.

Will pharmaceutical innovation decline with the addition of the Medicare hard cap? Although the hard cap will result in a decline in revenue of approximately 15-25% according to the CBO, it is important to note that big pharmaceutical companies both make up the vast majority of the revenue generated in the sector and do not spend much money on research and development into novel drugs. Research shows that 78% of patents approved by the FDA correspond with medications already on the market.

“Part of the problem is how pharmaceuticals use the patent system. Instead of creating new drugs, they extend existing patents beyond the initial 20-year protection set by the United States and use gimmicks, such as overly-wide patents, to block knowledge creation and issue patents for what is essentially the same drug. Losec, for example, which is produced by AstraZeneca to treat heartburn and ulcers, was later tweaked and placed under a new name. This enabled the company to issue a new patent for the barely modified medication, effectively extending the company’s monopoly on this type of drug well beyond the period granted by the original patent.” Mazzucato, M. (2019, April 1). Opinion | Big pharma is hurting drug innovation. The Washington Post.

Pfizer, the developer of one of the COVID-19 vaccines, spent $139 billion on share buybacks to boost its share price over the past decade compared to $82 billion on research and development. Any argument in favor of the current modus operandi of big pharma price gouging Americans in the name of innovation has to grapple with the current economic environment of a pharmaceutical sector pursuing profits over public health. Worse yet, Americans already pay large amounts of money on the research of medications through taxes. Every one of the 210 new drugs approved by the FDA between 2010 and 2016 was funded by taxpayers.

The COVID-19 vaccines developed by Pfizer and Moderna are great examples of the actual innovation performed in the pharmaceutical sector, which is often done at both the private and the University level in the United States. The innovation necessary for the rapid development of the COVID-19 vaccine wasn’t due to the reinvestment of profits into research. Instead, it resulted from many decades of taxpayer-funded science that eventually became mRNA-based vaccines. Pfizer and Moderna did not develop the vaccines and certainly did not spend the requisite amounts necessary to fund the innovation behind the vaccines. Studies have shown that taxpayers account for $18-39.5 billion of the development costs of the mRNA vaccines, only also to have to pay Pfizer and Moderna additional billions upon purchasing doses for U.S. citizens.

“While the NIAID was funding these basic science innovations, the U.S. Department of Defense was making high-risk investments in RNA vaccine technology through its Defense Advanced Research Projects Agency (DARPA). In 2011, DARPA awarded CureVac (a Sanofi-affiliated company) and In-Cell-Art $33.1 million to advance their vaccine platforms and test candidate products.6 In 2017, CureVac researchers published the first phase I clinical trial demonstrating that an mRNA vaccine could induce functional antibodies against a viral antigen, the rabies virus.7 In 2013, DARPA awarded Moderna $25 million toward developing RNA vaccines against the viral diseases Zika and Chikungunya, validating the concept that mRNA sequences could be used to produce a secreted human protein and potentially scale antibody responses against a specific target in the human body.” -Lalani, Hussain S et al. “US Taxpayers Heavily Funded the Discovery of COVID-19 Vaccines.”

The mRNA vaccine development represents a significant path forward for the pharmaceutical and healthcare industries -- a path that must acknowledge the role of government and taxpayers in the development of medications. Price controls can, and often do, result in decreased innovation in many sectors. Unfortunately, in a society as capitalistic as the United States, they appear necessary for items required for essential quality of life enhancement and to prevent mortality from curable diseases. U.S. taxpayers already pay significant sums for healthcare innovation for the entire world. It is time to stop the middle-man, rent-seeking, big pharmaceutical companies from extracting more from the economy than they are willing to invest.

The pharmaceutical industry has been plagued by profit-seeking motivation for a while now. There is little incentive to develop truly life-altering drugs, instead seeking to simply rebrand current drugs with slightly new uses. There may not be much money to be made with a drug that can truly make life better without the additional requirement of taking a prescription for the rest of your life. Big pharmaceutical companies have greatly benefited from the lack of novel drugs.

Research and development are notoriously tricky in pharmaceuticals, only about 14% of drugs that reach clinical trials win approval from the FDA. At a certain point, which Pfizer and Johnson and Johnson seem to have met, big pharmaceutical companies may be as much of a hindrance to competition in the sector as they are innovators. Does it make more sense to invest large sums of money in medications that may never head to the market or to invest large sums of money in stock buybacks and advertisement? Well, if you’re focused on health outcomes, the answer is clearly to spend additional money on medication development, but the fact is that is not what is happening when Pfizer and Johnson and Johnson are spending twice as much on selling as on research.

Is the CBO report correct that innovation will decrease with the enaction of Medicare price reform? The speculation is fair; it may well decline if the assumption is that no future legislation ever passes. The CBO predicted two fewer drugs over the next decade, an additional 23 fewer the following decade, and 34 fewer in the third decade. The new drugs may be novel, but new medications are often less valuable than even existing drugs. Just taking the first decade, you can assume that the odds are against humanity losing a game-changing drug out of two fewer drugs. The analysis of the second and third decades should be disregarded as wildly speculative – predictions for 20-30 years away are likely to look foolish (for better or worse), and that includes plenty of time for legislation that could spur additional pharmaceutical innovation.

Potential solutions for the very slight decline in novel drugs expected over the next decade include additional NIH funding and reforming patent law that Big Pharma exploits to prevent competition in the sector. A great article in the Harvard Business Review covers some potential fixes:

“The United States needs a new strategy for drug innovation that recognizes the new reality of the biomedical innovation process and the true, limited role of Big Pharma. We could start by reinvesting a substantial fraction of the hundreds of billions of dollars that could be saved from pending drug-payment-reform legislation into the most powerful engine of innovation in drug development: the NIH and its academic research partners. This would likely generate a flood of truly innovative, life-saving products — not a flock of me-too drugs — that small companies could perfect and Big Pharma could steer to market.” - Blumenthal, D. (2021, October 2). The U.S. can lower drug prices without sacrificing innovation. Harvard Business Review.

America is a wealthy country. We can afford to pay more than the rest of the world for pharmaceutical innovation – but the additional cost burden needs to be alleviated by taxation. When a fourth of your population suffers from not having enough cash to afford prescription drugs they need, you don’t have an innovation problem. You have an accessibility problem. Arguments in favor of keeping drug prices exorbitantly high are also in favor of American deaths from lack of medication access.

David Shor is the latest and greatest star among the wonks of think tanks and Twitter. The very bright data scientist has been blowing up the opinion sections of the national media the past week with three opinion articles in the New York Times, another in the Washington Post, and an entire feature in Politico. He has been making all the rounds for the past couple of years, from Vox to Bill Maher, preaching the good word of polls and reminding the left that the median voter in the United States does not share the same values as they do.

The latest run of Shor-press kicked off with his and co-contributor Simon Bazelon’s contribution to Slow Boring, the Matt Yglesias newsletter. The duo’s article was titled: “A permanent CTC expansion with a sharper means-test would protect poor kids better and be more popular.” Shor’s Blue Rose Research group has been busy conducting issue polling on hundreds of various issues, as he states here:

“Oftentimes, advocacy groups publish what amount to push polls, designed to show that every progressive issue position under the sun enjoys overwhelming support. Our polling is designed differently — it puts ideas through something resembling a real-world test to see which are genuinely compelling. That means using partisan frames: each question is structured as “Some Democrats in Congress have proposed Policy X, which would do Y and Z. Issue polling is also plagued by what’s known as acquiescence bias. This is the term for the tendency of survey respondents to just answer “yes” to any question, leading to overestimates of support for any given issue. Our polling mitigates this by providing a Democratic argument for a policy, and a Republican criticism. Our respondents are then asked “which party do you agree with more,” rather than “do you support this issue.”

The piece was undoubtedly very analytical and written by sharp minds yet concluded with policy recommendations lacking substance. The duo argued that the child tax credit should include additional means-testing to garner further voters’ support. The current child tax credit has an income threshold (for married couples) of $150,000, meaning the $3,600 per child annual tax break begins to phase out before reaching zero with a household income of $440,000.

The difference between no means-testing of the child tax credit (all parents receive $3,600 credit) and a threshold of $25,000 income is 48.9% support to 54.4% support, for a net change of 8.8 points. That puts the issue of not adding additional means-testing as unpopular for Democrats and thus likely to hurt them in electoral races. Shor’s entire philosophy is branded as “popularism,” using rigorous polling to garner the pulse of the nation so campaigning Democrats can win by running on the most popular liberal ideas. Shor doesn’t want the means testing, but that difference in polling was more than enough for him to recommend adding it. He adds a pretty poor defense that obfuscates the issue further:

“Given a choice between a more targeted benefit that is guaranteed to be around for poor families for years to come, versus a broader benefit with a significant chance of disappearing in just four years, it makes more policy sense to focus on protecting the poorest children.”

Neither the means-tested nor fully available child tax credit would be guaranteed to last forever, at most ten years. He is right that the Democrats have many limiting constraints at the moment. They have many issues to solve with assumedly even less than $3.5 trillion over ten years to spend. However, the more left-leaning critiques of means-testing are just as concerned with creating popular policy and certainly most concerned with protecting the poorest children, who are always the most at risk in a means-tested policy.

It may sound counterintuitive, but when social programs aren’t universal, you have difficulty serving the individuals who qualify for the program. This results in added administrative burden for both the state and the individual who must prove they can satisfy a test for income. From Matt Bruenig:

“The overall participation rate of the food stamp program is 85 percent and is only 75 percent for the working poor who likely have a harder time proving their eligibility to the welfare office. The participation rate of Medicaid is 94 percent for children, 80 percent for parents, and around 75 percent for childless adults. The participation rate of the Earned Income Tax Credit (and also presumably the Child Tax Credit) is 78 percent. The low participation in the EITC cuts the poverty-reducing effect of the program by around 33 percent, according to the Census Bureau, meaning that mainstream estimates of the EITC’s impact (e.g. those produced by CBPP) overstate the effectiveness of the program by at least 50 percent.”

The social democrat model would argue that the added administrative burden and lack of assistance due to income gap years due to getting fired or leaving the workforce would inevitably further cause support for the credit to decline. Whereas with a more available tax credit, you could potentially garner further support. It is important to note that even those in favor of a universal tax credit are also for taxing that money back from higher earners. Both a means-tested and a universal credit could have the same result to high earners through increased taxes, but the universal program would have the benefit of also reaching the poorest Americans. Sending a monthly $300 child tax credit to a household making $300,000 only to tax the amount back may sound counterintuitive until you factor in that the government already regularly sends payments and taxes household income. In contrast, the bureaucratic overlays required for testing income require more costly programs.

That battle, between well-designed, functional policy and policy that polls well, is ultimately the entire argument behind Shor and his more left-leaning detractors. Shor has a commendable strategy: he wants to get Democrats elected. The data paints a harrowing picture for Democrats, with the Senate and electoral college biased in favor of land instead of people. Thus, the party’s progressive wing must make concessions to help moderate Democrats win in conservative states. He believes the best bet to get blue lawmakers elected is to promote the most popular policies.

Shor is probably right on most of the above, the map looks terrible for Democrats in the short-term, and they will be disadvantaged for the foreseeable future. Unfortunately, he also has little theory of political change. Shor does not address the potential decline in popularity that could occur from a means-tested program that requires additional burdens on the poor and clawbacks, or overpayments due to the fact that the credit is based on income from the prior year (you never know the end-of-year income beforehand). Clawbacks are generally not appreciated:

“From 2003, there were substantial and very visible problems with overpayments, or more precisely visible problems in terms of the impact on claimants of having to repay overpayments. The number of overpayments, and their costs, were much higher than predicted. In the first year (2003/04), about one-third of all tax credits awards paid – nearly 1.9 million awards – were overpaid, at a cost of nearly £2 billion (House of Commons Treasury Select Committee, 2006). Media coverage reported confusion, hardship and debt as the government sought to recover overpayments.”

So, David Shor would like the Child Tax Credit to face means-testing at a threshold of $50,000, which results in a difference of polling of 48.9% to 53%. Research has often shown universal programs to be more popular than selective ones, but this meta-analysis concludes that it’s open for discussion, as the more popular policies may happen to be those that are universal, but not due to that criterium. Either way, this does represent a significant issue for Shor’s analysis because his proposal would be subject to Republicans doing away with it as well. It may be wiser to make a program that can build public trust and support, rather than a costly and over-bureaucratic policy that could reinforce notions that the government can’t do anything right.

David Shor’s entire analysis is supposed to be based on rigid polling and large amounts of data. The policy prescriptions seem pretty far afield from the recommendations on messaging that Shor became famous for on Twitter (e.g., his criticizing of “defund the police” as toxic messaging for the party). Also, it doesn’t even seem to fit his logic as his preferred Child Tax Credit prescription of permanence over universality polls is substantially worse! This Morning Consult poll has support for a permanent Child Tax Credit at 35%, much worse than the difference between the means-tested program and the universal program.

David Shor posted the following graph on Twitter that displays a mix of policies that, when talked about, either increase or decrease vote share for Democrats. Talking about policies such as Medicare pharmaceutical negotiation, adding dental and vision to Medicare, anti-usury laws, social security expansion, and taxes on the wealthy tend to increase Democratic vote share. Talking about policies such as lowering the voting age to 16, affirmative action, and police budget cuts tend to decrease voter share for Democrats.

The problem with all the “talking about” messaging electoral strategies that Shor advocates for is that they’re everlasting. It isn’t just “talking” but now enacting the highest polled policies because the electoral cycle never ends. The fear of another Trump presidency, or worse, and a long wave of red filling both chambers of the U.S. bicameral delivers a perpetual cycle where progressive Democrats will never be able to enact policies that their constituents demand, only the moderates.

It is no wonder that Shor loves Obama. He worked for his re-election campaign in 2012 and routinely praises Obama’s campaign for not talking about issues such as race and immigration. Obama was also a tremendous orator and, to many progressives, a disappointment due to his very liberal 2008 campaign where he played the hopeful antecedent of the end of the Clinton wing of the party. That disappointment contributed to a decline in the Democratic party voter identification, as Democratic party identification dropped further than Republicans during the same period while the number of independents rose.

David Shor’s star example of his messaging and platform may have won two landslide elections, outperformed polls, and garnered wide-spread support of a more diverse group of constituents, but what about the other members of the Democratic party? Under Obama, the Senate went from 60 Democratic senators to 46, and the House dropped from 257 Democratic congresspersons to 188. Democratic governors lost nine states they once led. The losses by the party were the largest under any president and led to the lowest number of Democratically held elected offices since before FDR.

What is the point of great messaging if it delivers poor policies that alienate constituents from your platform? You can point to many other potential causes of the shift away from Democratic support, but the cliff occurred during Obama’s presidency when he had a mandate and the legislative capital to enact it. He failed. There is a point in Shor’s polling where I would agree to take the current popular option over an unpopular one for the greater good of helping Democrats electoral odds, but it isn’t absolute. A minor to moderate difference in polled support between two policies must include the potential long-term consequences of enacting the more poorly designed policy.

The entire popularist prescription appears quite short-sighted, ignoring the simple fact that polling can change – once unpopular policies can become popular and vice-versa. When the Affordable Care Act was enacted in 2010, polling indicating it was generally underwater, with more individuals disapproving of the policy than approving. Despite its very moderate appeal, Obamacare was unpopular for many years until rapidly rising in popularity during the Trump presidency in the wake of the GOP’s efforts to repeal the ACA. The ACA wasn’t perfect legislation, but it reduced Americans without insurance from 16% to 8.6% by Trump’s inauguration date. By the time the GOP was able to win the requisite number of house and senate seats to pass a repeal of the ACA, they failed, at least in part due to the success of the policy.

All this should lead to a more nuanced prescription than David Shor’s strict moderation. This is unfortunate because his polling injects good data into the equation of political priority. There is a place for Shor’s analytics in the Democratic party that should lead to a more complete view of what the American people want, what can get more Democrats elected, and ultimately what can help the most people. Relying on polling alone will fail as they are too imprecise to rely on entirely. There is simply no way to craft the perfectly framed question; thus, trends over time using the same question are the only reliable use of polls. The popularist model needs to balance current polling with its prescription for the future, accounting for the potential consequences of bad policy and the rewards for substantive positive change for voters.

Embattled social media network Facebook has been facing a deluge of criticism recently, which ties in nicely with the timely six or so hour-long blackout of the companies' websites on Monday, October 4. Many users across Twitter were celebrating their inability to access Facebook, and some media outlets even reported that the "master code" for Facebook had been deleted, prompting even further celebration. No clue how anyone thought it possible to delete a social media's "master code," and sure enough, Facebook and its subsidiaries WhatsApp and Instagram returned by day's end.

The outage contributed to approximately $164,000 lost revenue per minute. The stock declined almost 6% before ending the day at -4.87%, effectively wiping out $40 billion in market cap for the company and a personal loss of $6 billion for CEO Mark Zuckerberg. Not fantastic, but the other news that dropped Sunday night before the outage for Facebook may be a bit longer-lasting and more challenging to change the companies' poor narrative than the short blackout.

Francis Haugen revealed her identity on 60 minutes as the Facebook whistleblower behind a series of documents that she shared with regulators and the Wall Street Journal that detailed the awareness of Facebook on the impact it has on poor youth mental health.  The former Facebook product manager who worked on "civic integrity" issues at the social media company released documents showing Facebook's research that essentially proves the company knew its social media was toxic for teen girls.

But, I also don't want to overstate the findings from Facebook's leaked research. Much of the research appears to have pretty small sample sizes, and the results were not wholly negative. Plenty of respondents reported that Instagram and Facebook made them feel better about themselves. The research seems as shoddy as most corporate-funded self-research, only this time the media pounced on the fact that Facebook, for the first time, at least admitted some awareness of its negative impact on teens. Facebook spokesman Andy Stone responded to the leaks:

"Every day our teams have to balance protecting the right of billions of people to express themselves openly with the need to keep our platform a safe and positive place. We continue to make significant improvements to tackle the spread of misinformation and harmful content. To suggest we encourage bad content and do nothing is just not true."

Some other details emerged from the leaks, all of which you can read at the Wall Street Journal's Facebook Files hub, which includes stories about privileged accounts avoiding community guidelines, Facebook's algorithms sowing discord to increase engagement, and high usage of open drug cartels and human traffickers. However, Instagram's mental health effect on teenage girls has drawn the most coverage and was the impetus for the Senate subcommittee hearing on Tuesday, October 5.

Ms. Haugen appears to be somewhat self-serving or, at the very least ignorant of the more significant issue. She isn't a whistleblower afraid for her life; she is simply well-off, chose to work at several big tech companies, including Alphabet, and decided to release documents that prove Facebook is aware of some of its actions. Who cares? The world already knew Facebook was poor for teenagers' mental health. While still inconclusive, we have pretty damn good studies on the effect from 3rd party researchers like the following:

A meta-analytic review of the relationship between social media use and body image disturbance

Social networking site use and self-esteem: A meta-analytic review

Is social network site usage related to depression? A meta-analysis of Facebook–depression relations

Why does it matter that Facebook also knew of the damages? It doesn't. They could be ignorant of the problem, but that doesn't make it any less valid. It is a public relations ploy to get Facebook to change its business model. That is clear with the messaging from Haugen:

"I don't hate Facebook," she wrote. "I love Facebook. I want to save it."

Nobody that "loves" Facebook is in any position to fix the social ailments caused by its existence. The PR ploy will likely fail, as all other media relations schemes have failed against Facebook. Facebook is the best in the business at just ignoring awful media. Besides, it is not likely that any legislation is coming on the issue. It is absurd to expect bipartisan legislation while Democrats want more censorship of disinformation while Republicans want to spread disinformation. This case has received attention primarily for its role in side-stepping the usual political battle and making it about the children. Still, it most likely will not result in any policy change.

Regardless of the outcome, what is the solution to Haugen's issues with Facebook? Haugen testified before the Senate that Facebook's algorithms should not be protected by Section 230, which famously shields social media companies from being held liable for publishing disinformation. The rule essentially provides Facebook with immunity from liability for the information users post on its site. Her argument specifically was that Facebook should not be allowed to utilize "amplification algorithms" and "engagement-based ranking" that Haugen deemed the culprit behind the harmful content causing poor esteem among teens.
"Right now, the only people in the world trained to analyze these experiences are people who grew up inside of Facebook," Haugen said.

Essentially, Haugen's policy recommendation is the same as Facebook's; she wants a new regulatory office specific to social media. "Right now, the only people in the world trained to analyze these experiences are people who grew up inside of Facebook," Haugen said. You can see the same proposal from Facebook VP of Global Affairs back in May of 2021, where he calls for a "new digital regulator" for the space similar to the Federal Communications Commission. Facebook has been asking for more oversight for years now, making the highly pedestrian leaked records appear almost part of normal daily operations.

When have you ever heard a company speak so softly against a whistleblower as this: "We don't agree with her characterization of the many issues she testified about," wrote Pietsch, Director of Communications at Facebook. "Despite all this, we agree on one thing; it's time to begin to create standard rules for the internet. It's been 25 years since the rules for the internet have been updated, and instead of expecting the industry to make societal decisions that belong to legislators, it is time for Congress to act."

The Data Protection Agency may be necessary and help in some ways (I don't think anyone defends current Facebook practices). Still, it is not the solution to the lack of accountability Facebook faces for its actions. That should be clear from the simple fact that Facebook wants the agency as well. Matt Stoller, a crusader against monopolization, has a good article on the potential dangers of such a "solution":

Yet the concentration of power in the hands of a small group is the fundamental political and economic problem with Facebook. We have never allowed one man to set rules for communication networks that structure the information ecosystem of billions of people. But that is the situation we're in. We have to radically decentralize this power. But a regulatory overlay in some ways would worsen the problem, because it would explicitly fuse political control with market power over speech and it would legitimize the dominant monopoly position of Facebook. -Stoller

I am somewhat sympathetic to bigness and centralization, but this argument is correct. Opening up a new agency to expose social media to even greater amounts of political influence and staffing it with the exact people that created the problem in the first place do not seem like extraordinary ideas. Seriously, the following line is either self-serving, ignorant of power dynamics, or both:

"Right now, the only people in the world trained to analyze these experiences are people who grew up inside of Facebook or other social media companies," said Haugen. "There needs to be a regulatory home where someone like me could do a tour of duty after working at a place like this," she said.

Stoller makes a good case for breaking up Facebook, but I think that is still probably short of a real impact on youth mental health. It would be a much further step than Haugen advocates, as it establishes the boundaries of power at play and helps limit the power of a giant company like Facebook. Facebook should have to compete with Instagram and WhatsApp, not just have the ability to purchase every competitor. The added competition from anti-monopolization policies would likely incentivize social media platforms to focus on privacy and child safety features to differentiate from "bad" social media companies. Those anti-monopolization practices should heal some of society's ailments by limiting the power of big tech.

Unfortunately, for many social media sites, the mental health issues and dysmorphia seem baked into the prevalent use of engagement tools; in other words, the system of likes, dislikes, and even simply using the platforms are the cause of the issue at hand.

Maybe Facebook could get rid of likes or engagement entirely, which could help teens focus less on trivial bullshit. I tend to agree with the Facebook in Haugen's head: "Facebook wants you to believe that the problems we're talking about are unsolvable. They want you to believe in false choices," Haugen said. It appears that Instagram may, most possibly, be causing some issues with society. Growing pains or not, it does not seem healthy to have kids growing up constantly socially engaged.  We have pretty good research on the deleterious effects of social media on teenagers that goes far beyond just the shallow claims of algorithm shaming.

Breaking up Facebook is a great idea that helps solve many other problems like the social media company's large amount of power held in America. Setting up a Data Protection Agency with former Facebook staff to specifically handle algorithms is incredibly insipid legislation Facebook wants and sets up a road to further political polarization. The difficulties that teenagers are facing are different than any prior generation has met. The constant socialization, lack of private life, and thus constant popularity contest is hardwired into Facebook, Twitter, and Instagram. It will take a drastic overhaul of the current social media landscape to lower the rapidly rising rates of anxiety and depression amongst US teens.

Despite holding a career in public service for the vast majority of her life, California Congresswoman Nancy Pelosi is damn rich. The Center for Responsive Politics puts Pelosi’s net worth as of 2018 at $114.7 million. The report uses disclosures from Congress members of assets and liabilities and gives an average between a minimum and a maximum the congressperson can account for owning. In effect, Pelosi could be worth as “little” as $40 million or as much as $251 million. “Damn rich” regardless.

Now, we all know Pelosi did not get that rich from her Congressional salary. Even with a very generous annual salary that has increased from $89,500 to $193,400 over her 34 working years (and even a bit higher yet during her Speaker of the House years). Some financial traders and more conservative outlets claim that Pelosi illegally made these millions through shady backroom deals. For the most part, Pelosi did not obtain her wealth illegally. Her husband, Paul Pelosi, is a businessman who owns a real estate and venture capital firm.

Paul Pelosi has some possible generational wealth to his name, as his father owned an insurance business in San Francisco while Paul was growing up. Most of the Pelosis wealth comes from investments in stocks and real estate, such as the couple’s investment in a St. Helena Winery, which was bought for $2.35 million in 1990 and is now worth a self-reported $5-25 million. All above-board, standard investment vehicles for a wealthy venture capitalist, albeit not preferable for a leader of the only U.S. party interested in redistributive economic policy.

Nancy Pelosi is a bit of a turd in the Democratic melting pot. She is a reasonably staunch liberal with a decent voting history but often stands in the way of substantial progressive change as Speaker of the House. Her disdain for Alexandria Ocasio-Cortez and the Squad, her love for PAYGO – the austerity measure that forces congresspersons to draft legislations that include funding in the form of either tax increases or spending cuts, and her utterly insane statement where she thanked George Floyd for “sacrificing his life” after he was murdered are a few recent flubs. Still, she is no Manchin or Sinema trying to train-wreck President Biden’s agenda. She comes off as a relatively savvy political player at 81 years old and falls in line with the Democratic Party agenda.

The problem is, her husband has been making trades this year that stand out.  Reddit’s WallStreetBets, FinTwit, and TikTok have had popular posts about following Nancy Pelosi’s disclosures and using the information to buy stocks. Generally, the responses are pretty facetious. For instance, a headline with the title “Nancy Pelosi Upset About the Debt Ceiling Talks” results in Twitter mentions of “she’s worried about her call options!”

Nancy Pelosi is not the only congressperson buying and selling stocks. In 2021, we have seen over 4000 stock trades for $315 million exchanged in by either Senate or House members. The difference is that Paul and Nancy Pelosi are hoovering up so much profit from their stock trades that they put hedge funds to shame in 2020. Most Senate and House members are also not buying many options, which are more technical than holding stocks. An option is a contract that allows the holder to buy or sell an asset at a certain strike before a specific date. The value of an option is much more volatile than the actual stock as the value is dependent on time to expiration, adding an extra variable to stock holding.

It is not illegal to purchase options as a sitting congressperson. And, if any congressperson has options on their ledger, it would be one married to an investment banker. All above board still, but again the Pelosis are just killing it this year. The entire stock market has performed very well for the past year; the SPY500 returned about 36% between June 2020 and June 2021 for one of its best-ever years. Pelosi still easily beat the SPY500 with average returns between stocks and options of 56%.

A 56% return on investment in one year is incredible. The average hedge fund in 2020 “only” had returns of 11.6%, notably underperforming even broader market at large. Pelosi’s options returns were even more robust, with a return of 66.7%. The returns the Pelosis generated in 2020 and 2021 are extraordinary and certainly raise some alarm for the future.

Still, it is not out of the realm of possibility for an investment banker to have a strong year. Many hedge funds have had returns equal to or greater than the year the Pelosis had – Paul is a special trader but not unique. Analyzing the trades Pelosi has disclosed, we can see that Paul only bought one type of option – calls, which essentially are a bullish bet that stock price will go up. It makes sense that someone who bought calls after the market crash in March due to the COVID pandemic would have generated returns beyond the broader market. The stock market had one of its all-time best years in 2020, calls on almost literally anything would have great returns but especially the assets that Paul traded most frequently. Virtually every single asset purchase by Pelosi was a tech stock, which explains his great returns and makes the trades appear a bit precarious.

Paul Pelosi started 2020 by exercising some leaps, or very long-dated call options, in Amazon and Facebook, a bullish bet from the prior year that paid off into $1-5 million worth of Amazon stock. He sold the remaining options due to expire within days for an additional $500,000 - 1 million. Then, in February, Paul makes the first potentially interesting trade, buying 10,000 shares of Slack Technologies, the popular work communications app, on February 20 and then Microsoft and Google call options immediately afterwards – both developers of some of the most popular communications programs like Microsoft Teams and Google Hangout.

Needless to say, Pelosi knocked those trades out of the park; he literally bought the Slack stock at the top of the stock market. The day after, February 21, the stock market began to crash and would not reach the heights of February 20 until six months later. It certainly looks like Paul knew something about the future need for communications software in February, which has led some to believe his wife could have tipped him off. However, February 2020 media was pretty doom and gloom already, with plenty of analysts predicting fallout from COVID. Investing in Slack, Microsoft, and Google right at the peak of the market and as it began to turn downwards seems more like a play based on market sentiment at the time. Paul Pelosi definitely initiated his trade with COVID in mind, but the logic that companies would require these communications platforms due to remote work doesn’t seem extraordinary.

The most damning trades Paul Pelosi made immediately preceded the House Judiciary Committee’s vote on reining in big tech monopolization. The week before the vote, Paul exercised 40 call options on Alphabet, which netted him $5.3 million of stock in Google’s parent company. He essentially executed a trade from the previous year where he made a bullish bet that allowed him to buy Alphabet stock at $1200 per share, while shares closed the day of trade at over $2500. But, that was only exercising options from the previous year, which merely expired as of the date of execution. You could make the argument that the purchases made in Apple and Amazon that same period may be more representative of potential insider information. Still, they also fit his modus operandi pretty straightforward – the man likes tech stocks!

Glenn Greenwald has a good write-up on some other occurrences of potential insider trading:

“Paul Pelosi in March exercised $1.95 million worth of Microsoft call options less than two weeks before the tech stalwart secured a $22 billion contract to supply U.S. Army combat troops with augmented reality headsets.

In January, he purchased up to $1 million of Tesla calls before the Biden administration delivered its plans to provide incentives to promote the shift away from traditional automobiles and toward electric vehicles.”

And, again, even mentioning the execution of call options seems a bit illogical. Paul’s options were expiring that day, and he continued to bet on the stock by exercising the right to purchase the shares. Ideally, if he had insider information, and the HoloLens announcement was such a big deal, he should have tried to time his option to include the HoloLens, U.S. Army contract.

That isn’t to say there is nothing wrong with the Pelosis’ trading while Nancy serves as a sitting congresswoman. Nearly all of Paul’s favorite stocks to trade are tech. Apple, Amazon, Alphabet, Microsoft, Facebook, and Nvidia make up most of his trading. That is not ideal when you have an ongoing antitrust case in Washington, where the Democrats should be prioritizing reigning in big tech monopolization. Nancy has come out in support of the antitrust efforts by Democratic lawmakers, but most should know that the Democratic parties’ efforts to modulate and appease moderate dealmakers always results in inadequate legislation. Any meaningful measure that could reduce the power that tech companies have managed to grasp would cause Nancy’s net worth to take a potential multimillion-dollar hit.

Paul Pelosi’s stock trading and the wealth generated from it represent a more significant issue of appeasement to capital and potential conflict of interest between capital and labor interests -- Paul was just the most successful from his stock trading. Congressman Dan Crenshaw invests much less money than Pelosi, but his trading appears to correlate much better with congressional news. For instance, he sold quite a bit of stock during the market crash of March 2020, then bought into numerous airline and travel stocks on March 25th-27th

The CARES Act passed on March 27, which provided billions in aid to distressed airlines forced to shut down during the COVID-19 pandemic. That seems exceptionally timely, although, like in Pelosi’s case, many rumors were swirling about the potential for airline relief funding. The difference is that Crenshaw wouldn’t have had to rely on rumors or second-hand sources.

The STOCK Act was passed in 2012 with clear goals outlining restricting the trading of stocks on insider information. Unfortunately, it did not go far enough, and insider trading is still occurring. How could it not? These are the representatives of the people, meant to be informed on as many issues as possible. They draft the policies that impact the stock market and the economy. There is simply no possible way for legislators to trade stock ethically. One of the writers of the STOCK Act, Tyler Gellasch, wrote the following:

“But given that Congress’ first obligation is to the American people and that serving that obligation so often requires having more knowledge than ordinary American investors, why should members of Congress be permitted to trade individual stocks at all? Why should we expect them to even be capable when making business decisions of separating what they know as a result of their public responsibility and what they might otherwise know as private individuals?

Members of Congress often have information that can mean millions or even billions of dollars to market participants. Should they knowingly be misappropriating that information for themselves, their families, or their friends? Of course not. But it’s also unreasonable to expect members of Congress to pretend to not know something.

The STOCK Act is a useful tool to combat corruption, but it isn’t sufficient. Stock trading isn’t the only way that members of Congress could be misusing the material, nonpublic information they learn. Information can also be valuable in real estate transactions, for example. Congress should consider prohibiting significant outside business activities for all members, and limit any securities trading to diversified funds, with all trades first precleared by an appropriate ethics office. That kind of process is common at investment banks and other firms where employees are often in possession of material, nonpublic information. Many compliance officers at companies like those sometimes even conclude that insiders ought to be prohibited from trading in entire industries. We should expect at least as much of members of Congress.”

Do Paul Pelosi and Dan Crenshaw have access to insider information? In Crenshaw’s case, undoubtedly. We don’t know for Paul, but let’s also not be naïve to the problem at hand. The current system somehow expects that legislators should ignore insider information for their stock actions, which would require them to regularly also ignore their self-interest and the interest of their family members they one day intend to bequeath their wealth. There is no way to balance the interest of the American people with the stock trading done by sitting legislators.

California Judge Yvonne Gonzalez Rogers handed down her decision on the Epic v. Apple lawsuit on Friday, September 10, after months of deliberation from the arguments in May. The final verdict was relatively simple: Epic was ordered to pay damages for violating its contract with Apple, and Apple was forced to remove its anti-steering rules from the App Store.

Apple stated after the verdict that "Today the Court has affirmed what we've known all along: the App Store is not in violation of antitrust law. As the court recognized 'success is not illegal.'"

Epic CEO Tim Sweeney tweeted about the decision:

Tim Sweeney appears more disappointed by the verdict than Apple, even though Apple lost on a long-standing business policy. Apple's anti-steering policy essentially banned app developers from alerting consumers of alternatives to Apple's in-app purchase system. It is still early to say the financial impact on Apple from this outcome until we know more about what practices are precisely allowed to steer customers to the developer's payment mechanism rather than Apple's.

Tim Sweeney comes off peeved because, even though Apple lost an important decision, Epic still stands to lose even more. The judge upheld Epic's contract with Apple as valid and reiterated that Epic knowingly broke its contract. A portion of Apple's developer contract is unlawful going forward, but Epic still has to pay for breaking the agreement by reimbursing Apple for lost profits when Epic had direct payments in-app. Epic argued that Apple's developer contract violated numerous antitrust acts, while the judge concluded that Apple only had a single offense against the California Unfair Competition law – and that a single violation by Apple did not justify Epic's decision to break the contract.

"In short," said Rogers, "Epic Games cannot simply exclaim 'monopoly' to rewrite agreements giving itself unilateral benefit. Its other identified bases: damage to its reputation and the Fortnite gaming community cannot constitute irreparable harm where such harm flows from Epic Games' own actions and its strategic decision to breach its agreements with Apple."

The decision by Judge Rogers called for a payment of $6 million from Epic to Apple for lost damages – Epic made around $12 million from Epic Direct Payment on iOS (Epic's alternative to Apple Pay). On September 13, the company paid damages equal to the App Store fee of 30% plus 30% of the revenue from November 1, 2020, through the date of the judgment on September 10, 2021.

Epic generated over $5 billion in revenue in 2020, $6 million is a drop in the bucket for both companies. The real challenge for Epic going forward is that it may be locked out of the App Store entirely in the future. Judge Rogers ruled that Fortnite would only return to the App Store if Apple wanted it to return. Apple certainly can benefit from allowing Fortnite back onto iOS, but if executives feel vindictive, don't expect it any time soon. Epic has already shown its hand. They plan to appeal and continue to pressure Apple to lower its 30% app fee.

So Epic already lost nine of ten counts to Apple, with the one count not helping Epic due to the loss of its developer license. Beyond the monetary losses from Fortnite not appearing on iOS, Epic is worried about further retaliation from Apple. Apple briefly sought to go as far as to remove Unreal Engine, Epic's most popular service that developers use to design video games. After the verdict in September, the court terminated Epic's preliminary injunction from October 2020, along with Epic's developer account with Apple.

The judge was not very supportive of Apple potentially blocking Unreal Engine in a retaliatory strike in October but reaffirmed Apple's ability to decide the contents of its App Store.

"If Epic lost access to Apple's developer tools, that wouldn't break any current apps using Unreal in the App Store (or on other platforms). The problem is more for developers going forward; if Epic can't use Apple's tools, they can't release bug fixes or new features. This most likely would mean Unreal-based games would break eventually in future versions of iOS and macOS, and Epic would be unable to do anything about it." -- Riley Testut, a popular game emulation developer

As a privately held company, we lack data on the revenue or profits generated from Unreal Engine games on iOS for Epic Games. Unreal Engine is probably the most widely used game development tool globally, although the engine is primarily used for console and PC gaming. Ultimately, if Apple blocks Unreal Engine on iOS and macOS, you would expect some game developers to also abandon Unreal Engine in favor of a game engine that can be ported over to iOS instead of making a game with no future on the App Store. Developing a game across two different engines for different platforms is most likely cost-prohibitive, a point Microsoft raised in the trial as well:

"Developing a game using different game engines for different platforms may be prohibitively expensive and difficult. In any event, it is not as cost-effective as using a game engine that supports different platforms... [Apple terminating Epic's account would force it to] choose between abandoning its customers and potential customers on the iOS and macOS platforms or choosing a different game engine when preparing to develop new games.

Even uncertainty about the Unreal Engine's ability to continue supporting iOS and macOS will make it less likely for Microsoft (and, I believe, other game creators) to select Unreal Engine for their projects. When game creators are planning development projects, which can last for years, it is important to have confidence that the chosen engine will continue to be available on and support all platforms on which the game creators plan to distribute their games." – Kevin Gammill, Microsoft's general manager for gaming developer experiences

The potential blockage of Unreal Engine on Apple products is assuredly the worst outcome for Epic in all of this mess. Fortnite is a more lucrative cash cow for Epic overall, with about $3 billion in revenue last year compared to Unreal Engine revenue of around $100 million. Still, Fortnite will not last forever, while Unreal Engine is expected to continue being the premier game development engine going into the future.

Epic is in a lot of trouble at this point. Apple has the legal power to block Epic from using developer tools and blocking Fortnite and Unreal Engine from its ecosystem. Epic was hoping to reduce App Store fees from 30%, side-loading of apps, or allowance of additional application stores on iOS. They won on one point with the anti-steering ruling, but they can't take advantage of the new rule without iOS access, and now Apple is threatening the future of Epic's entire business model.

Outlook for Apple

Apple prevailed on nine of ten charges leveled by Epic, but the one charge they lost could potentially hurt App Store profits from now on. Apple can be considered the winner of the verdict for simply avoiding the much more costly monopolization charges. Apple doesn't have to change its policy on 30% app fees or allow alternative markets, which were both outcomes Epic was hoping to achieve. Judge Rogers appeared skeptical of the 30% Apple fee and found no basis for the rate in her ruling, but still felt Apple was deserving of some payment. Apple escaped most potential monopoly charges for now.

The ruling was not entirely clear, but we know that Apple has to allow developers to direct users to payment options other than those ran by Apple. This is a huge win for every developer not named Epic and one of the most significant changes to App Store policies ever made.

"Apple Inc. and its officers, agents, servants, employees, and any person in active concert or participation with them ("Apple"), are hereby permanently restrained and enjoined from prohibiting developers from (i) including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app."

The court will retain jurisdiction over the enforcement and amendment of the injunction. If any part of this Order is violated by any party named herein or any other person, plaintiff may, by motion with notice to the attorneys for defendant, apply for sanctions or other relief that may be appropriate."

It's a bit vague, but we know that Apple is not the interpreter of the language of the ruling but instead the court itself. It appears that developers will be allowed to include external links, buttons, and calls to action to direct consumers to other purchasing mechanisms. That seems like a huge win for developers. They essentially cannot include their own in-app payment mechanism, but they can link to one from in-app. It will be interesting to see where this policy evolves before the December 9 start date for the injunction. We do not have enough guidance on how much power developers will have to steer customers to other payment processors. However, some developers have already stated their plans to test Apple on the new ruling.

If the anti-steering rule is as strong as HeyHey believes, this new rule, only valid in the U.S., could significantly impact the $6.3 billion the company rakes in per year from the country. Bloomberg notes in its piece that Loup Venture's Gene Muster put the range between $1-4 billion annual loss depending on the number of developers take advantage of the new policy.

Apple regularly posts profits annually above $100 billion, so don't expect much impact on Apple's stock. They are more than healthy enough to be hurt by even a $4 billion loss, although I doubt that the effect will be that severe. The new payment mechanism makes a world of difference for some companies that require a subscription, like Spotify, which only requires leaving the app once to sign-up and pay. However, 70% of App Store revenue is generated by games primarily via in-app microtransactions. It's unclear if customers will repeatedly choose to leave the app for a potentially inferior payment system.

Judge Rogers asked a representative for Epic if there was no anti-steering provision, would Epic still have a problem with Apple's system? "The customer could choose whether they wanted to stay and make the purchase on the app or do it some other way, right?" David Evans, an economist for Epic, admitted that nixing the anti-steering provisions "wouldn't eliminate the market power that Apple has here, but it would certainly diminish it." Evans said it would be more helpful for some apps than others — "it's pretty good for subscription-based companies that have a separate website, for instance, and less useful for mobile-only games that rely on a stream of microtransactions". But he acknowledged he hadn't conducted a specific study of the topic, so he wasn't sure exactly how big the issue would still be.

What comes next

Judge Rogers' ruling takes effect on December 9, 2021, but again not for Epic. Epic announced on September 22 that Apple denied its request to reactivate Epic's developer account. Apple's statement concluded that Apple would not consider any further requests for reinstatement until the court's judgment becomes non-appealable, which Sweeney tweeted could take as long as five years.

Apple seems to have a significant upper hand going into round two. While anything can happen on Epic's upcoming appeal, Judge Rogers did not just rule against most of the charges but found the arguments very uncompelling. She was regularly voicing in her opinion dissatisfaction over some of the arguments. Epic may continue fighting, but it could almost be time for a settlement after such a heavy loss for the company. Fortnite's lack of availability on iOS has estimated losses of around $26 million a month. That is not great, but not the end of the world for Epic, with annual revenues above $2 billion. Epic needs to settle to avoid even more costly retaliation from Apple, including the potential blocking of Unreal Engine on iOS and macOS.

Epic and Tim Sweeney have taken the loss pretty hard, but they delivered a potentially massive win for other developers with the anti-steering policy. A settlement that would allow Epic to take advantage of its win in court and remain in good graces with Apple going forward may be the wise play for now.

The Dallas Cowboys and Tampa Bay Buccaneers played a great game to open the 2021 regular season of the NFL with the most familiar ending imaginable. With the death stare towards nowhere, Brady just getting hyped before taking the field to lead the game-winning drive against a Cowboys team playing up to competition, only to surrender in the last minute. The shoot-out led to the best ratings for an NFL opener since 2015 with 26 million viewers for NBC. Those NFL ratings, combined with the reports of college football experiencing a resurgent rise in ratings for its own opening weekend, are a hopeful sign for a sport with some recent rating struggles.

My last article covered the rise of the NFL as America’s number one spectator sport, and furthermore, the only sport with a significant viewership above any other sport after the six decades-long decline in love for baseball. The NFL essentially rose in viewership every decade, and even the early years of the 2010s reflected a similar increase in viewership for the Super Bowl until a peak in 2015 with a championship game between the New England Patriots and Seattle Seahawks. Since that game, Super Bowls have been more likely to rank worse than any other this decade rather than the former year-over-year increase almost formerly expected.

Super Bowls aren’t a perfect metric for gauging viewership. A bad or great matchup changes the interest in the game, and traditionally big market teams competing in the championship are usually thought to be worth a bit more than small-market teams. Thankfully, for the past decade we have numbers on the average viewership numbers for regular-season games as seen in the following graphic.

The numbers resemble the Super Bowl changes in viewership reasonably well. Down years for the NFL in the regular season correspond to down years for the Super Bowl. Just like the Super Bowl, 2015 was the peak of viewership for the league. The 2015 Super Bowl and 2015 regular season refer to two different seasons. There is no excellent reason why the NFL may be considered worse today than then (outside of Peyton Manning’s retirement).

As reactionary as the answer may be, the national anthem protests certainly are a timely answer for the recent decline in NFL viewership. Colin Kaepernick began kneeling during the 2016 NFL preseason in protest against police brutality and systemic racism, which led to a significant backlash in conservative media. The typical perps like Tucker Carlson, Fox and Friends, and presidential candidate Donald Trump all denounced the protests as anti-American and drummed up opposition against the NFL.

It is hard to argue against why the NFL took such a sudden downturn. At the time, the National Anthem protests were viewed very unfavorably by whites, which make up a significant portion of NFL viewership. On the other hand, views of BLM and protesting, in general, have trended more favorably in recent years. Generally, it seems that the league may be out of its mini-recessionary decline in viewership due to conservative anti-SJW backlash. People are rightfully coming out and, while short of defending the rights of organized labor to protest, at least may recognize the hypocritical calls of “cancel culture” in social media spaces after canceling anthem kneelers. It is encouraging for the league the number of republicans that increased their opinion to “don’t know, no opinion.”

I’ll go ahead and call it now. Ratings are going to be really good this year for the NFL. Maybe not record topping, but the closest they have been since the peak 2015 season and Super Bowl. That’s not to say the NFL is out of the woods, though, as they have another flaw in their viewership demographic: the league is losing the essential 18-49 demographic fast.

The other big American sports leagues have had similar issues attracting this younger demographic in recent years. It appears the older Gen Z class that has been graduating into the 18-49 demo is just not as interested in sports. Polling has regularly identified a gap between Gen Zers sporting fandom interest and that of older millennials. For instance, this study found 53% of Gen Z considered themselves sports fans as opposed to 69% of millennials. The Gen Zers who polled as sports fans reported much lower levels of watching sports. Almost every sports league has less interest from Gen Z than other ages except for the NBA (very slight) and Esports (very large).

As the older sports-loving baby boomers and silent generation members are dying off, the incoming Gen Zers are consuming fewer sports than the leagues are losing from the deaths of former viewers. It’s not just the big sports leagues either. The Tokyo Olympics recently reported some of the worst ratings for an Olympics in many years. 48% of U.S. adults reported spending less time watching the Olympics in 2021 than in previous years. I don’t want to read too much into the abysmal ratings in the pandemic years that have resulted in disastrous ratings for most sports leagues. Still, even here, Gen Z reports much lower levels of Olympic interest than the Millennials before them.

So, across virtually all U.S. sports, the incoming generation spells for potential doom of a decline in total viewership. Plenty of sports were probably in line to hit some degree of saturation eventually; the NFL can’t just expect to increase their ratings year over year in perpetuity, but the decreasing size of Gen Z was already a slightly worrisome sign. Gen Z is approximately 7% smaller than the Millennial generation.

The sports leagues probably won’t be lobbying for a policy like the Family Fun Pack to incentivize young adults to get busy by taking the financial burden off. Still, they can focus on the lower viewership of Gen Z. A decline in weekly sports watching from 50% of Millennials to 24% of Gen Zers has to be combatted by the sports leagues. Any continued decline in viewership among future generations such as Generation Alpha1 would be disastrous for U.S. sports. The NFL, MLB, NBA, and any league that wants to remain popular going forward need to do what they can to appeal to Gen Z and younger.

“If you lose a generation, it destroys value and the connective tissue,” said Ted Leonsis, principal owner of Washington-based teams that compete in the NBA, NHL, and WNBA. “It’s what some of the big sports leagues are nervous about. Could we lose a generation because we didn’t give them access and the products and services they want?”

That quote was taken from this Washington Post article, which details some sports executives sounding alarm bells about various Gen Z qualities that need marketing towards. I would not focus on fixing issues such as these:

“The challenge isn’t about finding Gen Z,” said Kate Jhaveri, the NBA’s chief marketing officer. “It’s about attracting and keeping their attention.”
“They want to see our players in their real lives, see them with their wives, know what they eat or drink or are bingeing on Netflix,” Heidi Browning, the NHL’s chief marketing office.

That sucks! Sorry, but before we move to TMZing sports or changing a sport to make it more interactive or shorter and more conducive to fan’s attention spans, maybe try even being available to Gen Z in the first place. Stream entire games directly to the consumer with no subscription fee, only relying on ad support. Exactly the means sports have made television revenue for their entire existence in America. In this scenario, the sports leagues should make out even better without the broadcasters acting as the middleman between sports leagues and consumers.

TikTok videos are fine, do those too. It is a popular platform. Same for YouTube. But unless the sport would like to be resigned to appeal towards those services, the leagues need to embrace reaching as many youth and young adults as possible with their product. The product isn’t four-minute recaps or highlight reels; those should be advertising and encouraging fandom to the actual game. Unfortunately, as most games are currently locked behind a dated and expensive cable television model, those fans who may be interested cannot even access the games on their screens. For instance, the NFL has offered its Sunday Ticket app, which has every Sunday day game except local broadcasts, for $300 but only for DirectTV subscribers.

Using a paywall behind cable made sense when cable usage was high. Even today, after years of cord-cutting, about half of all baby boomers still have cable. That is compared to 25% of Gen Z and 19% of Millennials. Gen Z honestly hardly reports much traditional TV watching at all, preferring video games and social media, so don’t give me any bullshit about broadcast antennas either. Focus on the one device they definitely have and use: their phones.

Put. Entire. Games. On. A. Free. App.

That is it! Just do that! You can have separate packages, but at least don’t do something foolish like blackout local games like you currently do. The local games are the ones that most need to be free. The prime heyday of getting everything you wanted at any price is over. People can’t afford it, and the youth think you’re boring. You have to focus on building a new generation of fandom for the first time in a long time. The products are pretty decent. The NFL, NBA, MLB, and NHL are all great entertainment that are, for the most part, in very competitive shape, but you have to make it easily accessible to Gen Z.

A billboard with similar sentiment was posted with the following message during the Field of Dreams game that took place in Iowa in August:
“Commissioner Manfred: End The MLB Blackouts, Let Iowans Watch Their Favorite Teams.”

When asked about the blackout situation in Iowa, Manfred was forced to vaguely address the issue where currently the Chicago Cubs, St. Louis Cardinals, Chicago White Sox, Minnesota Twins, Kansas City Royals, and Milwaukee Brewers are unavailable to watch on MLB.tv or on national broadcasts. What are Iowan baseball fans expected to do to watch a baseball game? The commissioner said the following:

“There’s nothing more important to us as a business priority than delivering games to fans,” Manfred said during a pregame press conference ahead of the “Field of Dreams” game. “That’s what we’re about. The blackout situation is a complicated one. It involves regional broadcasters, distributors, our individual clubs. And we are spending a tremendous amount of time in an effort to get to a better place in terms of where our games are distributed.”

MLB and the NBA have most of their games streamed on regional sports networks like Bally Sports or NBC Sports. Outside of the nationally televised games that are usually the most high-profile matchup, the rest are packaged and bundled off from each team. It makes sense this could be a slow process, either renegotiating with regional sports networks or simply waiting until they expire, but it has to be worked out. Thankfully, MLB owners unanimously voted to cede control of digital broadcasts to the league, which would allow MLB to offer a subscription to MLB.tv with access to local games. That is, only if they can wither the expected early losses from regional sports networks demanding lower costs.

The NFL doesn’t have the same problem. All of its games are either shown nationally or packaged to one service in NFL Sunday Ticket. DirecTV has been pretty savvy with its contract with the NFL by being the exclusive home to the full range of NFL offerings. You literally cannot watch an out-of-market broadcast without DirecTV unless DirecTV is unavailable in your area (the streaming-only service is available in just 29 of the 210 U.S. media markets). That could end in 2022, with DirecTV’s exclusivity deal with the NFL set to expire after 27 years.

NFL Commissioner Roger Goodell seems to be on the right track with recent comments about Sunday Ticket “maybe will be more attractive on a digital platform” as streaming platforms continue to add subscribers at the expense of traditional pay-television. So far, Amazon has been rumored as the potential front-runner for the rights to NFL Sunday Ticket which would be a large shift for the league away from cable and firmly in favor of streaming. Disney and Apple are the other rumored companies in the running for the rights, making it reasonably safe to count DirecTV out of the mix. DirecTV is worth about $16.5 billion compared to the $2 trillion tech companies.

That’s not to say any of these developments between MLB and the NFL are perfect. Sunday Ticket does not offer local games. Both services are far from free, but MLB.tv is moderately affordable, and NFL Sunday Ticket could be offered at a lower price if the service will be primarily used to juice Amazon Prime subscriber numbers. I still think the primary worry needs to be putting the product in front of as many Gen Z eyes as possible, so an ad-revenue model would make more sense, but these developments are certainly in the right direction.

Football is back! The reigning king of sports ratings is finally back as of this Thursday’s NFL kickoff. Football has long been America’s favorite sport with both ratings and polls pointing towards the NFL as being the dominant sports league since the 1970s. Baseball is no longer "America's pastime." However, including “past” with “time” neatly fits baseball and its fall from dominant American sport status.

Today, about 10% of Americans polled by Gallup say they prefer baseball as their favorite sport to watch, down from a peak of 39% in 1947. Americans generally feel the same about the orange ball today, with another 11% saying basketball is their favorite sport. This number has been fairly consistent throughout the past century outside of a jump in popularity during the Michael Jordan-era 90s. Meanwhile, love for the spheroid ball had catapulted from 17% during 1947 to a peak in 2005 of 43%, and football currently sits at around 36% of Americans claiming it as their favorite spectator sport.

The 50s-60s

The National Football League only ever grew to its modern-day popularity thanks to the invention and adoption of the television. It’s no shock that football began its ascent in the 1950s during the expansion of television into homes. The number of televisions rose from 9% in 1950 to about 50% in 1955 and almost 90% in 1960. By 1968, after polls such as the one above by Gallup declared football as the new favorite spectator sport, The Wall Street Journal wrote, “not many years ago, baseball ranked with apple pie, the flag, and motherhood as an American institution. If you weren’t enthusiastic about it, you risked being considered unpatriotic. Not now.”

The leadership of the NFL during the 1960s decided to tie their lot with television. Their game was more visual, more action-packed, and by the late 1960s, fans were complaining about the “downtime” during baseball games. Once Americans actually started watching the sport, instead of listening to radio broadcasts, the games were just a bit too dull compared to football. The NFL wisely capitalized off its more visceral product by packaging its entire season of games and then sold the rights to CBS and shared profits equally among clubs.

The MLB, as is often the case with legacy institutions, was slower to adapt to the television revenue landscape. While the NFL sold its rights as a package deal, MLB had its teams negotiate deals individually. Primetime baseball games were mainly for the most popular clubs, and MLB could not get the extensive broadcasting deals the NFL could obtain. MLB never had the televisual product as the NFL to begin, but they certainly could not afford to compete with a league that exerted complete control over its members and used that central planning to power its broadcast into American homes.

The 1960s was a time of changing the guard where MLB finally had real competition for “America’s Pastime.” By the late 1960s, NFL ratings regularly trumped MLB ratings, but even the Superbowl would represent merely a slight advantage in ratings over a single World Series game. In aggregate, the minimum of four games and up to seven games made the World Series still comparatively more widely viewed than the first several Super Bowls. Same in regards to the regular season: each NFL game would have more viewers than an MLB game, but the 162-game MLB seasons in the late 60s and early 70s put MLB ahead in aggregate totals.

Take a look at the next couple of graphs for the history of World Series and Super Bowl ratings.

The 70s-80s

The 1970s were good for both the NFL and MLB. Ratings increased steadily for both organizations until peaking in 1978 for MLB. That year, the New York Yankees and LA Dodgers finale, a championship sequel from the prior year, culminated in 44.28 million viewers. The 1978 World Series will likely forever remain the most-watched baseball event.

The 1970s were good for MLB, but they were otherworldly for the NFL. The Super Bowl went from 44 million viewers in 1970 to 76 million viewers in 1980. The World Series experienced an increase in viewers of around 30% over the decade while the Super Bowl increased 72% and well beyond ratings MLB could ever dream of reaching. The NFL had firmly eclipsed MLB during the 1970s with viewership MLB would never reach; MLB couldn't have known it at the time, but the league was stagnating while the NFL was just revving up.

The surrounding years of the 1970s were generally great for baseball, but the 1980s were a time of substantial decline in viewership for the league. World Series ratings in the 1980s exhibited a decline of about 25-35% by 1990, while the NFL had a slight increase outside of Super Bowl XX between Chicago and New England, which had a massive 92 million viewers that went unmatched for a decade after. Still, the rating performance of the NFL in the 1980s was subpar compared to the surrounding decades.

The NBA hasn’t been mentioned yet, and that’s only because they have been such a distant third place sport for spectating in America that it just hasn’t been relevant. That changed a bit in the 1980s. The NBA had trouble with ratings decline from the 60s into the 70s until the early 1980s rivalry between the Bird and Magic era Lakers and Celtics ripped the league back to prior success. The rivalry culminated in ratings that nearly matched the average viewership of the World Series for the first time in the history between the leagues. The Magic 80s primed the NBA for its MJ-fueled propulsion later in the 1990s to even greater heights.

The 90s-00s

The 90s were a grim continuance of MLB’s experience from the prior decade. Less viewership in the World Series and All-Star games year over year. There was a brief blip in the late 1990s around the peak of the steroid era, but the home run chase of 1998 neither slowed MLB’s decline nor was as pronounced as people thought at the time. The small ball-dominant early 80s didn’t stop the loss of viewership, and by the 90s, we learned the dongers didn’t really help either. Total MLB home runs hit per season went from 3000 in the early 80s to 5000 in the late 90s. As cool as home runs are, the league couldn’t sustain the pressure from the steroid scandal, which left reeking desperation behind MLB’s lenient approach in the first place.

The NFL continued its ascent to stratospheric heights during this decade. The Super Bowl would regularly top 90 million viewers with help from the Emmitt Smith and Troy Aikman-led Dallas Cowboys dynasty. After 1992, the NFL never had a championship game with less than 80 million viewers (a pretty weak Falcons team in 1998 was partially responsible for the least-watched Super Bowl since 1992 – that game still topped 83 million viewers).

Meanwhile, the NBA was having its most successful decade thanks to the Chicago Bulls and number 23. The Bulls won six Finals series in the 1990s, and each average series viewership was in the top 12 all-time for the sport. The last Chicago three-peat that concluded in 1998 was the most-watched NBA game of all time with 29 million viewers. MJ’s retirement meant losing his “secret stuff” for the NBA and a rapid decline of the sport. The following two Finals had the lowest viewership in a decade.

The ascent of the NBA contrasted with MLB’s decline led to the first-ever competition between the two leagues. Average viewership for the 1993 NBA Finals was higher than for the 1993 World Series, a first in the battle between the two sports leagues owed mainly to Michael Jordan’s Chicago Bulls appearing in their first three-peat NBA Finals finale.

The battle between the NBA and MLB championship viewership count has only intensified since that first win for the NBA due to the continued decline of MLB into the aughts with the worst viewership for a World Series of all time in 2000 (and subsequently 2006, then 2008, and so on). The Boston Red Sox managed to stop the bleeding in 2004 with their Bambino curse-breaking run that culminated in a World Series that is still the most-watched since 1996. The bleeding would pick up one year later with a new all-time low.

The NBA also declined in the ratings during the 2000s; it was just not quite as pronounced as MLB’s decline. The Lakers managed highly watched Finals with youngsters Kobe Bryant and Shaquille O’Neal, but the Spurs championship runs in the aughts were the least-watched Finals the NBA has ever had.  Generally, the 2000s battle between MLB and the NBA was in favor of MLB most years; only a Celtics-Lakers rematch (similar to the highest ratings draws from the 80s) could propel the NBA above MLB.

The NFL managed to increase its Super Bowl viewers nearly year-over-year through the 2000s, but it was not until 2006 that the league had a championship game go over 90 million viewers like the Cowboys and Broncos were able to muster in the 1990s. Maybe it was the somewhat lame Patriots dynasty of the early 2000s, but since that 2006 Super Bowl, no finale has ever had under 90 million viewers. In fact, by 2010, the NFL finally hit triple digits with 106 million viewers.

That gets us to 2010-Present. I plan to cover that in much more detail across the three leagues in my next article. I have much more data over the average viewership from in-season for the last decade and plan to detail the fall of the NFL in recent years along with the continued downward trajectory of MLB with a little COVID talk spiced in. Finally, I will solve the misery that plagues all three major sports leagues and spells potential disaster for television revenue in the future.