"Is There a Way Forward?"

The photo: An approaching storm, as seen from our window at the Oyster Point Hotel in Red Bank a couple of weeks ago. But the sun shone the next day. Some will say I am Panglossian in my optimism, but I do believe the U.S. has the ability to self-correct. In his 2021 letter to shareholders, Warren Buffet wrote: “Despite some severe interruptions, our country’s economic progress has been breathtaking. Our unwavering conclusion: Never bet against America.” To which I add, Amen.

 

 

Sydney M. Williams

 

Thought of the Day

“Is There a Way Forward?”

August 26, 2026

 

“The free access which many young people have to romanticize novels and

plays has poisoned the mind and corrupted the morals of many a promising youth.”

                                                                                                                    Reverend Enos Hitchcock (1744-1803)

                                                                                                                     Memoirs of the Bloomsgrove Family, 1790

 

Each generation is concerned for the next. Ours is no different. I worry. But should I? For a country at the peak of its economic and military powers, and still a beacon of freedom for the oppressed and the aspirant around the world, the mood of Americans, at least as expressed by some commentators and some in the media, is bleak. On the other hand, foreign visitors to the World Cup appeared to have seen something in America that we natives have missed: they lauded the size of the country, the spirit of its people and their generosity; they praised its abundance – what is available in the stores and the size of its homes and cars; and they noted the freedom of its people. Who is right?

 

While I remain a long-term optimist, I worry. Is classical liberalism disappearing into socialism on the left and isolationism on the right? Ad hominem attacks have replaced reasoned debate. Self-righteous prigs on the left assume all Republicans to be racists, homophobes, and misogynists, while smug conservatives suppose all Democrats to be Communists and to lack an appreciation of our history.

 

Most immediately, we face a fiscal crisis. Federal debt recently crossed $40 trillion. As a percent of GDP (121.5% at the end of 2025), it is higher than it was at the end of World War II (119.1%). Entitlement spending in 1960 represented about 25% of the federal budget – roughly the same as defense. Today it is close to 60%, while defense spending has declined to 12 percent. Rising deficits have ballooned interests costs from about 9% of the budget in 1960 to 14% today. We are on an unsustainable path, unaddressed by either political party. Despite Treasury Secretary Bessent’s decision to double the size of long-dated bond buybacks, bond vigilantes will step in if politicians continue to avoid the problem.[1]

 

There are other concerns: Will autonomous robots surpass human intelligence and be used for nefarious purposes? Studies from Harvard and Stanford indicate that public school student performance has declined for over a decade. Those studies are supported by declining performance of U.S. students on PISA (Programme for International Student Assessment) tests. While major crime figures show a decline, there has been a surge in anti-Semitic incidences. Ethical standards are said to have “evolved,” whatever that means. Church attendance has been declining for decades, and today the average teenager spends five hours a day on social media, versus nine to twelve minutes a day reading books for personal interest.  Much of mainstream media lauds the harvesting of eggs but is silent on the benefits of motherhood. According to a March 2026 Pew Research survey only 47% of American see their fellow Americans as morally good.  

 

While stock markets have surged – 62% of Americans are invested in the stock market either directly or indirectly – I worry that a decade of low interest rates have inflated leveraged personal balance sheets. A growing percentage of individuals are involved in speculative pursuits: Approximately 25% have been involved in legal sports betting, about 20% have purchased cryptocurrencies, and 15% have put money into prediction markets, a market that exploded in 2024. Sounds like gambling to me. Falling tech stock prices and excess leverage abetted the July collapse of Leopold Aschenbrenner’s Situational Fund, as assets fell from $45 billion to $10 billion in a month. Was that a harbinger of things to come?

 

Politics have devolved into the “MAGA” right and the Socialist-progressive left. Politicians are cantankerous. Mr. Trump tells us what a fantastic job he has done, while far-left Democrats promise tuition-free college, making the rich pay their “fair share,” expanding the Supreme Court, and opening our borders.

 

Party interests soar above national unity, even as we celebrate 250 years of democracy and freedom. Why? And is there a way forward? One is reminded of William Butler Yeats’ 1920 poem, “The Second Coming:”

 

“Things fall apart; the centre cannot hold;

Mere anarchy is loosed upon the world,

..................................

..................................

The best lack all conviction, while the worst

Are full of passionate intensity.”

 

But we have been in tough straits before: On December 20, 1860 South Carolina became the first state to secede from the Union; they were followed by ten more states. Seventeen years later, and after the deaths of three quarters of a million soldiers, the Union was, finally, fully reunified. The stock market crash of October 1929 led to a depression that lasted for more than ten years, to the start of World War II. From the late 1960s to the early 1980s, our financial markets were in turmoil: stocks fell 50%; the yield on the 10-year US Treasury bond rose from 5.6% in 1968 to 15.6% in 1981; inflation peaked at 15% in March 1980. In late August 1990, after Iraq had invaded Kuwait, British Prime Minister Margaret Thatcher admonished President George H.W. Bush with advice that would be good for our leaders today: “Remember, George, this is no time to go wobbly.”

 

From the first immigrants, America was blessed, geographically, and with a diverse population without aristocratic antecedents. Our government was founded by men schooled in the enlightenment by those like John Locke, Montesquieu, John-Jacques Rousseau and David Hume. It was a land that allowed for experimentation in government – not one founded on military might, royalty, or the church – but one composed, as Lincoln said at Gettysburg on November 19, 1863, “of, by and for the people.”

 

As for the question that makes up the title of this essay, yes, I am sure there is a way forward. I have faith in the American people. That I cannot chart its course does not mean it is not there. I believe common sense, which has dictated America’s passage through history will prevail. Good men and women will emerge to lead the way. Course corrections will be necessary, but answers will be found. That is not to say there will not be shoals or rough seas; for I am sure there will be. But a way forward will be found. Clouds will dissipate, and the sun will shine. 

 

 

 

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[1] An excellent op-ed on this subject was posted by Stanley Druckenmiller in the August 25, 2026 issue of The Wall Street Journal.

"Europe - One Man's Perspective"

 Yesterday’s violent sell-off was a reminder to recall Benjamin Graham’s advice: “In the short run the market is a voting machine, but in the long run, it is a weighing machine.”

 

I don’t pretend to have any insights as to the future direction of stocks, but I would caution against quick judgments. A grandson, a graduate student, born in 2001, asked me yesterday if he should be concerned about the market. While we should always be alert, ‘concerned’ was too strong a word. I told him that the compounded annual price return of the DJIA, since he was born, was about 6%, roughly the same annualized return since I was born 84 years ago. Not that that means anything, other than to suggest stocks may be fairly priced, but one has to expect volatility. Stocks can become overvalued, just as they can become undervalued. Five years ago, the market acted violently to the outbreak of COVID. In March of that year 20 days out of 23 trading days had the DJIA up or down more than 1.5%. On March 12, the Index was down 10%; the next day it was up 9.4%. Uncertainty leads to volatility, but long-term investors have always benefitted by the magic of compounded returns – that the market, in the short term, is a voting machine, but in the long term it is a weighing machine.

 

Now, on to today’s TOTD, which has nothing to do with the market.

 

Sydney M. Williams

www.swtotd.blogspot.com

 

Thought of the Day

“Europe – One Man’s Perspective”

April 4, 2025

 

“Europe was created by history. America was created by philosophy.”

                                                                                                                                Margaret Thatcher (1925-2013)

                                                                                                                                British Prime Minister, 1979-1990

 

I remember my first trip to England, looking out from the plane’s window at the island’s green fields, thinking that it was from this place that most of my ancestors sailed westward across the Atlantic to a new world. Most were poor, traveling as indentured servants, but endowed with a belief in the promise of a new start in a new world. They were driven by optimism, a belief that an unknown future in a strange country would be better than what was ordained for them at home. It was with a sense of wonder and pride in their courage that I gazed at a land that, had they not emigrated, I might have called home.

 

However, what prompted this essay were recent condescending remarks of Vice President J.D. Vance and Defense Secretary Pete Hegseth. In his February 14^th speech in Munich, Mr. Vance said, “What I worry about is the threat from within.” While I am sympathetic to the idea of the threat from within – a failure to focus on economic growth, anti-democratic attempts to silence opposing opinions (for example, the extraordinary treatment of Marime Le Pen), and the failure of most European nations to assimilate hordes of migrants seeking refuge, and the consequence of their impact on culture. However, his patronizing tone unnecessarily imperils our relationship with Europe. And the comments by Vance and Hegseth, relayed by Jeffrey Goldberg of The Atlantic, from what is now being called “SignalGate:” Vance: “I just hate bailing Europe out again.” Hegseth: “I fully share your loathing of European free-loading. It’s pathetic.” While it is true that most European countries have not complied, until recently, with the two percent rule for defense contributions, most have increased their spending since then President Trump made a fuss in 2017. They should give credit where credit is due

 

Americans should be careful about belittling old allies. The United States – for better or worse – is far different than Europe. More than a hundred and fifty years ago, Henry James wrote to Harvard professor Charles Eliot Norton: “It’s a complex fate being an American & one of the responsibilities it entails is fighting a superstitious valuation of Europe.” Unlike Europe, where migrants mostly live segregated lives, years of assimilation in the U.S. have produced a multi-cultural population, so that almost all Americans, whether white, black or Asian, can trace part of their ancestry to one country (or several) in Europe.

 

And consider what Europe has gifted us over the Centuries: Artists like Michelangelo, Rembrandt, Constable and Picasso. Writers like Tolstoy, Jane Austen, Victor Hugo, and Dante Alighieri. Composers like Bach, Vivaldi, Debussy and Tchaikovsky. Scientists like Archimedes, Galileo, Darwin, Einstein and Enrico Fermi. Thinkers and philosophers, from Plato and Aristotle to Adam Smith, Voltaire and Nietzsche. Think of the palaces, museums and cathedrals designed by architects like Louis le Vau, Bernini, Juan de Villanueva and Christopher Wren.

 

These are gifts from the past that keep on giving, as can be heard in any symphony, seen in every museum, and read in libraries and classrooms. But what about the present and the future? The European Union is a worthwhile experiment. Keep in mind, the Continent was embroiled in two world wars in the 20^th Century. Peaceful coexistence is better than war. But there remains much that is unknown. Will a united Europe retain the customs, cultures and languages of their individual states? Or will it become an amorphous mixing bowl? George Washington once, allegedly, forecast: “Someday, following the example of the United States of America, there will be a United States of Europe.” I hope so.

 

During the Cold War, Western Europe and the United States were united in their pledge to defeat the scourge of Soviet Communism. Europe was divided, because of an imperialistic Soviet Union, by what Winston Churchill described as an “iron curtain” that had “descended across the continent.” One consequence was the formation of NATO three years later, in 1949. Russia’s continued belligerence, after the collapse of the Soviet Union in 1991, meant that NATO remained relevant, but the situation changed. Russia was smaller, but still the possessor of thousands of nuclear weapons, and had aligned with other totalitarian regimes like China, North Korea and Iran. Europe, after being battered in two World Wars, a decade-long global depression, and a forty-five-year Cold War, focused on becoming social welfare states. Since the end of the Cold War, E.U. nations have spent roughly ten times as much on “social protection” as on defense. (Eastern Europe, with close memories of Soviet occupation, spends less on welfare and more on defense than does Western Europe.) 

 

But that generosity has brought other problems. As Margaret Thatcher once said: “The problem with socialism is that eventually you run out of other people’s money.” Europe has not focused on the productive side of its economy. In 2023, the U.S., with a population 110 million less than that in the E.U., produced a GDP 62% larger. Since the turn of the millennium, Europe’s economy has increased 134% versus 172% in the U.S. Europe needs to ensure they can continue to afford the governments and societies they have created.

 

As well, the continent has a more significant problem – an unaddressed demographic problem, which will further affect their future well-being. Not enough women are having babies. The total fertility rate (TFR) in Europe in 2023 was 1.38. The last time that rate was above replacement (2.1) was 1974. Today, the population of the European Union stands at 449 million, with an average age of 44.7. Projections suggest that the population in Europe by the end of the Century will decline to 420 million, with an average age in excess of 50. Europe is not alone with this demographic challenge. South Korea, Taiwan, Singapore, Hong Kong share the dubious distinction of having the planet’s lowest birth rates. China at 1.18 and Japan at 1.26 are both below Europe’s. The United States’ is higher but at 1.78, still below replacement. Low birthrates in Europe are being offset by increased migration. For example, in 2023 3.67 million babies were born in the E.U., while 4.6 immigrants arrived from non-E.U. countries. Nevertheless and as mentioned above demographers suggest the population will continue to age, and their culture will change to accommodate their changing populations. No one knows what the economic and cultural effects will be, but over the past several decades growth rates have shown a persistent slowing, yet the welfare state continues uninterrupted. That trend is unsustainable.

 

Nevertheless, for reasons both sentimental and practical, Europe is worthy of our friendship. It is the first line of defense against Russia. As well, it is our past and, given what it has produced over the past two thousand years, it is a fount of inspiration and brings pleasure to our futures. Despite despots and kings, wars and famines, the world is a better place because of Europe. It needs a correction but deserves our respect.

"Leadership: Six Studies in World Leadership," Henry Kaufman

 At a time when the world sits precariously, in an apparent Thucydides Trap, between a self-indulgent West and an assertive China, this book has relevance.

 

Sydney M. Williams

 

Burrowing into Books

“Leadership: Six Studies in World Strategy,” Henry Kissinger

February 18, 2023

 

“For a nation to pretend to total autonomy is a form of nostalgia;

reality dictates that every nation – even the most powerful – adapt its

conduct to the capability and purposes of its neighbors and rivals.”

                                                                                                                Henry Kissinger (1923-)

                                                                                                                Leadership: Six Studies in World Strategy 2022

 

The leaders Kissinger discusses were forged in the crucible of the Second World War, the three oldest as players, the three youngest as observers. They were all classically educated, at a time when character was emphasized; they were intelligent, aspirant, and advanced to positions of authority based on merit. They had a positive effect on the world they inherited. Kissinger writes: “…[In] the unending contest between the willed and the inevitable, [they] understood that what seems inevitable becomes so by human agency.”

 

Another author might have selected different leaders; this list comprises those whom Kissinger knew, worked with, and respected. The central foreign policy challenges of this period – the end of World War II through the collapse of the Soviet Union in 1991 – the rebuilding of Europe and Japan and the building of a world order; the Cold War; and the struggle between liberty and tyranny. While each was unique, these six had in common directness and boldness, and they were unafraid of offending entrenched interests.

 

Through biographical sketches, Kissinger presents a history of those forty-five years, which saw the economic and political revival of former Axis powers, the end of European imperialism, the birth and struggle of new nations, and the collapse of the Soviet Union:

 

           Konrad Adenauer (1876-1967): He served as Mayor of Cologne from 1917 until 1933. “As an adult,” Kissinger writes, “Adenauer had experienced the German state’s three post-Bismarck configurations…under the Kaiser…under the Weimar Republic…and under Hitler, culminating in self-destruction and disintegration.” He was elected the Federal Republic of Germany’s first post-War Chancellor. In ten years, his Country had become a full partner in Europe and the Atlantic Alliance.

 

            Charles de Gaulle (1890-1970): “A sensitive reader and author of poetry as a child…The virtue of self-mastery, sketched in his journal, was to become a central feature of his character.” During the War, he kept alive the concept of sovereign France, saying she must be on the side of victory. “If she is,” Kissinger quotes from de Gaulle’s journal, “she will become what she was before, a great and independent nation. That, and that alone, is my goal.” De Gaulle restored the dignity of France.

 

           Richard Nixon (1913-1994): Kissinger served as Nixon’s Secretary of State, so knew him well. He doesn’t shy from his faults. There was the decisive and thoughtful Nixon, the one he describes in this book. But there was also the insecure Nixon “uncertain of his authority and plagued by a nagging self-doubt.” We are told that Nixon’s foreign policy views were “more nuanced than his critics’ perception of them.” “The essence of Nixon’s diplomacy lay in his disciplined application of American power and national purpose…,” with the opening of China his principal accomplishment.

 

           Anwar Sadat (1918-1981): “Of the individuals profiled in this volume,” Kissinger writes, “Sadat was the one whose philosophical and moral vision constituted the greatest breakthrough for his time and context.” “His policies,” he adds, “flowed organically from his personal reflections and his own interior transformations.” He believed “that Egypt’s freedom would be achieved through independence…His aim was to resurrect an ancient dialogue between Jews and Arabs…their histories were meant to intertwine.” This he did, as Egypt’s President from October 1970, until he was assassinated on October 6, 1981. 

 

Lee Kuan Yew (1923-2015): The first Prime Minister of an independent Singapore, he served from 1959 until 1990. Singapore is an authoritarian state, but Lee’s rigorous enforcement of the city-state’s laws has made it one of the least corrupt nations in the world. In a world of relaxed Western morals, which Lee saw as “freedom run amok,” he was a pragmatist. He preferred a market economy to statism, because it produces higher growth rates. He sought talented foreigners and brought women into the workforce, because he could not achieve his goals without them. “I was never,” Kissinger quotes Lee, “a prisoner of any theory. What guided me were reasons of reality.”

 

Margaret Thatcher (1925-2013): She was brought up in rooms above her father’s store, “lacking hot water and an indoor bathroom.” A graduate of Oxford with a degree in chemistry, she was turned down for a research job at Imperial Chemical Industries (ICI): “This woman is headstrong, obstinate, and dangerously self-opinionated,” was ICI’s internal assessment. Ironically, those qualities led to her political success. Thatcher, Kissinger writes, “was an implacable advocate of self-determination…in the right of citizens to choose their own form of government…and in the responsibility of states to exercise sovereignty on their own behalf.” She restored England’s economy, her sense of dignity and self-respect, in a world where she was no longer hegemonic. 

 

The world in which these six leaders lived had changed from an hereditary-aristocratic model prior to World War I to a middleclass-meritocratic one in the post-World War II period. During that time, the sun set on the British Empire, affecting both Egypt and Singapore. World War II saw the collapse of France in 1940, the near collapse of England the same year, and the devastation of Germany by 1945. The United States emerged as the wealthiest and most powerful nation on Earth. None of the six profiled grew up privileged. Two of them – Adenauer and Sadat – spent time in prison. De Gaulle and Lee had to deal with enemy occupiers of their countries. All were students of history.

 

Henry Kissinger has provided an intimate and masterful history of that time, with an emphasis on six individuals who played out-sized roles. In his conclusion about Thatcher he writes, in words appropriate to all six: “But only love of country and her people can explain how she wielded power and all that she achieved with it.”

"Lighten Up"

                                                                     Sydney M. Williams

30 Bokum Road – Apartment 314

Essex, CT 06426

www.swtotd.blogspot.com

 

Thought of the Day

“Lighten Up”

August 8, 2021

 

“There’s a way you political folks have of coming round and round a plain right thing.”

                                                                                                                                Harriet Beecher Stowe (1811-1896)

                                                                                                                                Uncle Tom’s Cabin, 1852

 

 

It is not that I am without concerns, for everything that happens today is a ‘crisis.’ We live on a planet that has been around for 4.5 billion years. Over that time, it has been warm enough in Connecticut, where I live, to host dinosaurs and cold enough to place it under thirty feet of ice. By the time of the last ice age, man had been around for tens of thousands of years. He adapted. Yet today’s changing climate is said to present an existential challenge for the planet. “Woke” governments and large businesses demand diversity, equity and inclusion, but what they really mean are uniformity, unjustness and exclusion. Universities, once places for inquiring minds, have become venues for intellectual conformity. In sports, men, as transgender women, compete against biological women. Merit has fallen victim to social equity. What gives? The United States was founded on principles of personal liberty and the rule of law, derived from the Enlightenment. Should we let what has taken 250 years to create devolve into darkness? 

 

We should not. We need to lighten up. The political atmosphere has become nasty. In an essay (“Old Glory, new anger”) in the August issue of The Spectator, Peter Wood wrote: “There is the wrathfulness of the political left, stemming from visceral hatred of Trump and his supporters.” As for the Right, he noted: “Their complaint lies far deeper as they see the purposeful destruction of American values by an elite that bullies and derides them.”  Friends and family members are no longer able to air political differences without one being called a racist and the other a toady. If we are to survive as a free, decent and independent people, composed of myriad races, religions and nationalities, political leaders, the media and universities must promote tolerance and mutual respect. To achieve this, they must encourage traditional American values, like family formations and public schools that teach. They must reaffirm the values of common sense, responsibility, hard work, merit and reintroduce civility and humor.

 

The political spectrum is linear, with autocracy at one end and anarchy at the other. Understanding that, we should know where on that line our own political philosophies lie. Fundamentally, our differences are simple. Progressives believe equitable progress is best achieved with more government involvement. Conservatives believe in what Margaret Thatcher said in Gdansk in 1988: “Economic freedom and personal freedom go hand in hand.” The first depends on the ability of a few hundred senior bureaucrats. The second relies on millions of people making millions of decisions. There are gradations of belief. A few extremists are clustered at either end, believing in either the benevolence of autocracy or the benignity of anarchy. Mainstream media would have us bunched (along with them) at extremes – the “woke” on one end and “deplorables” at the other. Most of us, however, lie within a few degrees of the center. But anger divides us, and communication is difficult.

 

Abetted by vitriolic, non-stop talk radio, biased cable and network news commentators, ignorant Hollywood and sports figures, sanctimonious university personnel, politicians who see both profit and votes in discord and “woke” corporations who just want to get along, we are being pushed, unwillingly, toward extremes. Our minders are puritanical, meanspirited, stupid and humorless. For students, fear of not being politically correct has meant withholding healthy emotional release. On college campuses political debate is discouraged and mental health distress is rising. A 2019 study by the American College Health Association found that 87% of college students expressed being overwhelmed. To improve conditions, the Association suggested empowering students, launching wellness campaigns and offering a “decision tree.” Absent from suggestions were open debate or fun and laughter, the latter being a well-known antidote to tension. Remember the old Reader’s Digest column, “Laughter the Best Medicine?” But in 2018, the threat of censorship kept Jerry Seinfeld and Chris Rock from performing on college campuses.

 

Humor that disparages should be shunned. But the ability to laugh is important. Mark Twain looked at politics through a lens of humor: “Suppose you were an idiot and suppose you were a member of Congress…But I repeat myself.” P. J. O’Rourke once wrote on the differences between Democrats and Republicans: “The Democrats are the party of government activism, the party that says government can make you richer, smarter, taller, and get the chickweed out of your lawn. Republicans are the party that says government doesn’t work, and then get elected and prove it.” Political correctness, which abjures humor, has infected all aspects of our lives, including the National Football League. Dan Mitchell, economist and former senior fellow at the Cato Institute, recently forwarded the following: “Redskins change name to ‘Lizard People,’ to better represent the population of Washington, D.C.” 

 

Would today’s politicians be offended and find jokes about them hurtful? Would they cry ‘Victim?’ Perhaps, but so what? They are public figures, light on wit but heavy with hubris, so subject to satire. Harriet Beecher Stowe’s quote in the rubric speaks to politicians whose dancing around truths can be a source of fun. Laughing at oneself can be endearing. Lyndon Johnson once said: “Being President is like being a jackass in a hailstorm. There’s nothing to do but stand there and take it.” Ronald Reagan used humor to deflect criticism from opponents. In a 1984 debate with the 56-year-old Walter Mondale, the 73-year-old Reagan said: “I want you to know that also I will not make age an issue of this campaign. I am not going to exploit, for political purposes, my opponent’s youth and inexperience.” In recent years, that self-abasing humor has been missing from political discourse. Obama, Trump and Biden are noted for egos, not for laughing at themselves. 

 

Peter Wood ended his piece: “Despair breeds wrath and that fire, once ignited, will engulf us all.” If our “betters” in politics, the media, campuses, “woke” corporations, the sports world and the entertainment industry fail to dispel the anger that envelopes our nation, which is my assumption and fear, then the responsibility to find light in this darkness falls upon ourselves. Turn down the news, pick up a Wodehouse novel, watch a Bob Hope movie, take a walk in the park, try “forest bathing,” as Peter Wohlleben wrote in The Heartbeat of Trees. Visit with family and friends. Just stay off politics and discover what you have in common. Laugh. Life is short. Those of us in the United States and in other free nations are fortunate to be alive and to live where and in the time we do. To go through life angry is self-defeating.

 

Most of us have beliefs that cluster toward the center of the political spectrum. It has been, more than anything else, the media, and especially social media, that has divided us. We are after all fallible. No one, not the President of the United States, not the senior Senator from Kentucky, not the Congresswoman from California’s 12^th District, knows what the future holds. But we should not let the darkness of despair overwhelm us. We should read, watch and listen to the news with healthy skepticism and a lively, restorative sense of humor. We must lighten up.

"Rsik"

 

 

Sydney M. Williams

www.swtotd.blogspot.com

 

Thought of the Day

“Risk”

May 12, 2021

 

“If no one ever took risks, Michelangelo would have painted the Sistine floor.”

                                                                                                                                                Neil Simon (1927-2018)

 

Recently, while walking around Boone Hall Plantation and Gardens, in Mount Pleasant, South Carolina, my son and his family came across an alligator. They watched it, but wisely did not approach it. Risk aversion can be a wise decision. Seth Klarman, president of Baupost Group once wrote: “In contrast to speculators preoccupation with rapid gains, value investors demonstrate risk aversion by trying to avoid loss.” But as Paul Singer, another wise investor, remarked regarding the role of government in our economy: “…the forces of risk aversion and constant conflict serve to stultify and narrow the range of ideas up for debate.” We must walk the line, avoiding obvious risks, but being unafraid to speak out and take risks. “Security,” wrote Helen Keller, “is mostly a superstition. Life is either a daring adventure or nothing.” Eleanor Roosevelt’s advice: “Do one thing every day that scares you.”

 

Every day we make hundreds, perhaps thousands, of decisions that involve risk. Many, if not most, are subconscious – standing on one leg to put on our trousers, reaching high for a coffee cup, ignoring the slippery spot on the floor, crossing a street. Do we take the short cut over the mountain, or the longer but safer route? Determining risk is a measurement of success versus failure. In investing, businesses calculate the potential for profit against the possibility of loss, which is why the Biden Administration’s proposal to strip Pfizer, Moderna and Johnson and Johnson of their patent protections for COVID-19 vaccines add risk to all future investments drug companies make in research. If patent protection can be breached, what does that say to those who invest in scientific research, and to those who risk everything in the creative arts, all of which are supposed to be protected by intellectual property rights? 

 

At a time when hesitancy has caused the number of daily vaccinations to decline by almost two thirds, the President, who was fully vaccinated in December, should not have worn a mask when outside and not surrounded by others. Yet he did just that last week when he and his wife left Jimmy and Roslyn Carter’s home. The message: the vaccine does not assure safety. When the FDA ordered Emergent BioSolutions to suspend production of Johnson & Johnson’s single dose vaccine because seven out of seven million vaccinated patients developed life-threatening blood clots, was the risk worth the cost of scaring people off being vaccinated? On Jimmy Kimmel’s show last week, Dr. Anthony Fauci said he was frustrated that nearly 26% of the population won’t get the vaccine, yet he said he would not dine in an indoor restaurant, despite being fully vaccinated. What kind of a message was he sending? Being vaccinated will not eliminate all risk of getting COVID-19, but it greatly reduces it. Responsible leaders lead, not inject fear.

 

While COVID-19 made us more risk averse health-wise, we have become more precipitate in our willingness to take financial risk. Financial and commodity markets soared over the past twelve months, especially products like crypto currencies, with the price of Bitcoins having risen over 500% from $8815.23 on May 12, 2020, to $56,871 yesterday. Given its volatility, is it possible to gauge what a cup of coffee or a tank of gas will cost in Bitcoins tomorrow or in two months? Over the past year, the value of Tesla stock has risen 280%, from $161.88 to $617.20 yesterday. While the company’s growth rate has been phenomenal, has not risk for the investor increased with a price to earnings ratio over 500 times? During that same time, the Dow Jones Industrial Average rose 44%%, from 23,764.78 a year ago to 34,269.16 yesterday. Over the past year, copper prices are up 100% and wheat is up 22%, suggesting inflation may well be in our future. Stock markets reflect future economic growth and imply a discounted rate for forecasted earning. US GDP is forecast to be up 6.5% in 2021 and 3.1% in 2022. Based on consensus earnings estimates, the S&P 500 is selling at 22X 2021 earnings and 19X 2022 earnings. How does one measure risk in valuations and the likelihood that forecasted earnings will be correct? With Treasury borrowing record amounts, what interest rate should be used in discounting future earnings? In the May 1, 2021 issue of The Credit Strategist, Michael Lewitt wrote: “We are in a bubble because valuations of virtually every asset class are untethered from economic fundamentals.” However, the decision to sell assumes one can successfully time markets. But, as Laszlo Birinyi in his May Market Commentary wrote, “…since 2009 [with the S&P 500 up 280%], there have been 3,082 trading days, but just 60 of those days have accounted for the entire gain in the market.” Who among us is that astute?

 

Government believes it can remove risk in people’s lives and achieve equity, by focusing on equality of outcomes, rather than equal opportunities. But does not an anti-meritocratic, government-led diversity policy risk unintended results? Historically, individuals were free to make choices, assume responsibility, and then reap the benefits or suffer the consequences of their decision. In the Republican response to President Biden’s State of the Union address two weeks ago, Senator Tim Scott (R-SC) made the point: “The beauty of the American Dream is that families get to define it for themselves.” In mediating risk, will the opportunity to better one’s life be diminished? To live freely is to accept risk. When does cradle-to-grave security interfere with the freedom to create individual opportunities?

 

We should not live in fear, yet a well-intentioned government intent on protecting us makes people Eloi-like. Schools and colleges have created an environment – now passed on to businesses, government offices, Hollywood and the media – where to challenge the consensus is to risk retribution or worse. Whites are told to view themselves as oppressors, to atone for the past sin of black slavery. To disagree is to risk condemnation. To question whether a trans woman should compete in female sports is to risk rebuke. To question Critical Race Theory, which itself is discriminatory, is to be tagged a racist. Is aversion to risk in expressing opinions what we want for our children, students, employees and citizens?

 

One result of this preference for a collective emphasis on conformity and government-ensured safety over freedom and personal choice has been a rise in pessimism for the future. A Gallop Poll last year found that pride in the U.S. is the lowest in two decades. A Pew Research survey in 2019 noted that by 2050 the U.S. will be worse off in many ways, including the national debt, political division and the cost of health care. That pessimism has manifested itself in record low fertility rates. For 2020, according to data from the CDC released last week, the total fertility rate (TFR) was 1.64, the lowest since tracking began in the 1930s. (A TFR of 2.1 is needed for a population to remain constant.) This was not simply a response to COVID-19, as total births have been declining since 2007, the last year the TFR was above replacement. By 2050, it is expected that the number of people over 65 will exceed those under 18. People who fear the future don’t have children. How do we recover the optimism of our Founders who risked so much?

 

Fifty-seven years ago, Caroline and I took a risk in getting married. I had done my military service but was still in college, with no idea as to how I would make a living. Despite a future we could not see, we had faith in each other. The road ahead held challenges and included potholes, but we believed in ourselves and in the Country in which we were blessed to be born, raised and where we lived. So, my advice: Be not afraid to take risks, just not foolish ones, like petting an alligator. “In a world that is changing really quickly,” said Mark Zuckerberg, “the only strategy that is guaranteed to fail is not taking risks.” Margaret Thatcher once wrote: “Discipline yourself to do what you know is right and important, although difficult. It is the high road to pride, self-esteem and personal satisfaction.” My advice: Be self-reliant, responsible, and accountable. Do not let government dictate choices or deter you from taking sensible risks to improve your lot. Look ahead, optimistically, with clear, wide-open eyes.

"The Debate"

Sydney M. Williams

30 Bokum Road – Apartment 314

Essex, CT 06426

www.swtotd.blogspot.com

 

Thought of the Day

“The Debate”

October 1, 2020

 

“I love argument, I love debate. I don’t expect anyone just
to sit there and agree with me; that’s not their job.”

Margaret Thatcher (`1925- 2013)

Interview, 1980

The Telegraph

 

When I awoke on Wednesday morning, I received the following from a friend, a former British jurist now retired and living in Switzerland: “There can be no greater symbol of American decline than the sight of those two elderly gentlemen slugging it out without dignity or sell-restraint.”

 

It is hard to disagree with my friend’s assessment, and it is remarkable how far removed from Margaret Thatcher we have come. While it is likely that Mr. Trump did not pick up undecided voters, I suspect more damage was done to Mr. Biden. Mr. Trump played the role he has played for the past four and a half years – a crude, unabashed disruptor of political norms. On the other hand, Joe Biden, who has been largely invisible for the last few months, confirmed concerns of those who worry about his mental acuity. While most of his comments and answers were lucid, he stumbled over words and phrases, and his eyes, especially as time went on, took on a glazed, empty look. Mr. Trump is rude, while Mr. Biden is not well. The first we have known for years; the second we are just realizing.

 

In what I thought was one of the better analyses of the debate, Conrad Black, in the New York Sun, wrote: “President Trump could have won decisively if he had just followed Napoleon’s famous advice not to ‘interrupt your enemy when he is making a mistake.’” While Mr. Biden was effective when he spoke to the camera, when he spoke for longer than a minute or so, his clarity became befogged, and he stumbled over what words came next. Thus, President Trump’s interruptions saved him from further embarrassment.

 

Issues remain: COVID-19, the economy; riots in blue-run cities versus law and order, the Supreme Court, climate and the Green New Deal, illegal immigration, China, Russia and the Middle East. While voters know where Mr. Trump stands on these issues and what he has done, they received little insight as to what Mr. Biden would do. Mr. Trump was accused for not condemning far-right, white supremacists. That is not precisely true if one reads the transcript. Interestingly, Chris Wallace did not ask Mr. Biden to condemn left-wing extremists like Antifa, which is an “idea, not an organization,” according to Mr. Biden.

 

Trump was Trump, so probably did not lose many supporters. On the other hand, Biden, at times, looked frail and confused, though he did manage to cross the finish line. The fact that handshakes are forbidden in this time of COVID-19 removed even the perception of unity and civility. 

 

There were no winners in Tuesday’s brawl in Cleveland between two aging white men, but there were losers – the American people.

"A Look Back to the Past Decade"

Sydney M. Williams

Thought of the Day

“A Look Back to the Past Decade”

January 14, 2020

“Clearly, a civilization that feels guilty for everything it is and does

will lack the energy and conviction to defend itself.”

                                                                                    Attributed to Jean-Francois Revel (1924-2006)

                                                                                    French journalist and philosopher

                                                                                                 

In his 1961 work, A Study of History (a study of the rise and fall of twenty-three civilizations), Arnold Toynbee concluded that civilizations die from suicide, not by murder, brought on by a decline in the moral fiber of society. When a New York Times reporter compared the killing of Qassim Soleimani to the murder of Martin Luther King, Jr., the Left never blinked, despite the implied insult to the Reverend King, his family and followers. When the West fails to defend the genocide of Christians in Africa, but are supplicant to Muslims who murder them, does that reflect a moral stance or a fear of retaliation? “A decline in courage may be the most striking feature that an outside observer notices in the West today. The Western world has lost its civic courage,” spoke Aleksandr Solzhenitsyn at the Harvard commencement in 1978. The decline in moral courage has worsened over the past forty-two years. We in the West are more prosperous than ever before, yet we are filled with discontent: If we are black, we are victims; if we are white, we are supremacists; if we are Jews, we are subject to anti-Semitism; if we are Asian, we suffer from reverse discrimination. Unemployment, including minority unemployment, is the lowest in fifty years, and 2019 year-over-year wage growth was the highest for low-wage earners. Yet few of us seem happy with who we are. Perhaps because family has been subordinated to the village and the state?

There were, during the past decade, trends that might be a cause of this despair. While none began in the Twenty-teens, they accelerated over the past ten years. All stem from a desire for power, a sense of political correctness and identity politics coated in hypocrisy, and a belief we should apologize for the success we have had, individually and collectively. We were told we didn’t build the business we built. We tear down statues that represent our history. Hashtags rule and victimization reigns. In colleges and universities, the humanities have been attacked as representing only dead white males who promoted exclusivity. We are told to be inclusive, but not when it comes to political opinions. Where, for example, is the diversity of ideas promoted by a racially and sexually diverse slate of Democrat candidates for President?

Four trends come to mind: The increasing estrangement between bureaucratic global institutions like the United Nations and the European Union and the nation states that compose them; the aging of populations, especially in Western nations and Japan; the decline of participation in organized religion, and the curtailment of free speech. The consequence has been disillusionment and partisanship, fueled by supercilious entertainers and journalists whose readership and viewership are in decline.

Our democracy is predicated on the principle of representative self-government. A concerned and knowledgeable voter is assumed. When America’s Constitution was written in 1787, it was a revolutionary document, even though democracy had been invented in Athens in the Fifth Century BC by the statesman Cleisthenes. The idea that people could govern themselves was, nevertheless, a radical concept in the 18^th Century, as Athenian democracy barely survived a century before morphing into rule by the elite.

Today there are those, including me, who fear a similar fate for our democracy. We see the rise of non-representative global institutions like the United Nations and the European Union, both staffed with appointed bureaucrats, unaccountable to the people of the nations they represent. This Orwellian world was anticipated by Margaret Thatcher in May1992. A few months after the signing of the Maastricht Treaty, she wrote an article for The European: “Experience has taught us that the best system under which to live is a democracy where members of parliament are seen to be accountable to the electorate.” She assured her readers that she was as idealistic about Europe as federalists: “We are,” she wrote, “just less federal.” Today, the European Commission and Parliament employ over 55,000 people in Brussels, Luxembourg City, Strasburg and Frankfurt. Parliamentarians from the twenty-eighty countries in the EU impose taxes and write laws, which affect the domestic affairs of individual states. So, the question arises: Will bureaucrats in Brussels preserve democracy in London, Paris, Berlin, Madrid, Rome, Vienna, Budapest and Warsaw, or will they drift, as they have, toward rule by non-elected elitists?

The United Nations has expanded its responsibilities beyond its Charter, signed in June 1945. Its original purpose was to be responsible for maintaining peace, developing friendly relations and achieving international cooperation among nations. It has grown from 51 nations, with a staff of 300 in 1945, to 193 nations and a staff of 44,000 today. It has instituted campaigns for issues like “sustainable development goals,” “climate change,” “sexual violence in conflict and “preventing sexual exploitation and abuse” – all worthy goals, but should misogynist autocrats in Syria tell Danes how to behave toward women? Should Muslim clerics in Iran preach religious tolerance to Israelis? Should Chinese dictators educate Americans on environmentalism? Should Macau and Luxembourg lecture Mali and Burundi on agriculture and water rights? Bureaucrats, justifying their jobs, have created a quagmire that mocks its original purpose. Departments like the Human Rights Council, with a membership that includes representatives from Libya, Venezuela, Somalia and Pakistan – all violators of human rights – are more concerned with equality in representation than with the promotion of human rights.

“Demography is destiny” is a quote generally attributed to the 19^th Century French philosopher of positivism Auguste Comte (1798-1857). It holds that the future well-being of a nation is dictated by births and deaths, immigration and emigration – that a shrinking and aging population leads to economic stagnation and eventual decline. The example of Japan suggests those trends can be mitigated – at least for a while – by the use of debt. But ultimately such a nation is left with fewer and older people to pay off ever-increasing financial obligations. The CIA, in their The World Fact Book for 2017, lists 224 countries by total fertility rate (TFR) – the average number of live births to a woman over her lifetime. For a population to show an increase, a number of 2.1 is needed. Of those countries listed, 106 show a TFR of below 2.1. With the exception of Israel, no Western, wealthy or democratic nation is replacing its population through births. This is a worrying trend for anyone who believes that it has been the liberal ideals and ideas of the West that have given mankind democratic governments, individual liberty and sustained rises in standards of living. TFRs in Europe and the U.S., for example, were about 3.8 in 1950; today, they are 1.6 and 1.7 respectively. The median age in Europe in 1960 was about thirty-three. Today, it is forty-three. In the U.S., the numbers have gone from twenty-nine and a half to thirty-eight. Lyman Stone, writing in the January 2020 issue of National Review, wrote that the global decline in births over the past decade is a function of concern over wealth and housing. Low birthrates suggest pessimism for the future. The consequences will be felt not only in terms of slower economic growth, but in rising risks to the preservation of democratic institutions and, in fact, the physical safety of the people.

A Pew Research survey in June 2018 equated more education and greater wealth with lower church attendance. Ironically, the greater the income inequality in a nation the higher the church attendance, which explains why nations in Africa, South America and parts of Asia have greater church attendance than those in Europe and the United States. The wealthier we are and the more we know (or think we know), the less our need for God. A 2010 Eurobarometer survey showed that only 51% of Europeans believed in God. It is difficult to imagine that that trend reversed in the past ten years. In the twenty-five years between 1980 and 2005, church attendance in England declined by 40%. In France, the number of churches vandalized in 2018 was 1063 – almost three a day. While Christianity is in decline, Islam has been ascendant. According to Giuliu Meotti, cultural editor of Il Folgio, over the past thirty years more mosques and Muslim prayer centers have been built in France than all Catholic churches in the past century. While Muslims represent only 9% of France’s population (the largest percentage in Europe), more of them attend weekly religious services than do Christians. TFRs for Muslim women in Europe is about twice that of Christians and Jews. In the U.S., statistics are similar. A Pew Research survey done in October 2019 showed that 65% of Americans describe themselves as Christian, down twelve percentage points in the past decade. The losses have been evenly divided between Protestants and Catholics. What makes these figures more troubling (at least to those of us who feel that, on balance, religion has been a force for good) is the combination of declining religious beliefs with an aging population, not what one would have expected.

The First Amendment of our Constitution provides our right to free speech, along with freedom to assemble and to practice the religion of our choice. It was a revolutionary concept in 1787. Those rights have been challenged and, in times of war, abrogated. We are now living through such a period, with conservatives being denied opportunities to speak on campuses, with “hate” speech being defined as anything uncomfortable to whomever deems it so, and with ubiquitous, private technology companies imposing their own views as to what is acceptable in terms of speech and what is not. There is no question that decency and respect help society be more livable. But the risk of imposing any limitation – whether it is the Right’s concern about big tech’s preference for Leftist politics, or the Left’s refusal to allow conservatives to speak on campuses – is that it is akin to a camel getting its nose under the proverbial tent. A restriction based on a dislike for “hate” speech will lead to restrictions on other speech at odds with which ever Party is in power. We should never forget that we have the right not to listen to and not to read those with whom we disagree. Civilized people recognize that opinions differ and that it is through reasoned and respectful debate that solutions are found. The Golden Rule had its origins in the Bible, when Jesus described it as the second great commandment: “Do unto others as you would have them do unto you.”  Words to live by, even though a strict obeisance might have denied comedians like Don Rickles or Rodney Dangerfield. That would have been unfortunate, as I believe the world would be the poorer for their absence. Nevertheless, for those who find their humor repulsive, listening is not mandatory. But the ability to laugh at one’s self is healthy in a complex, racially and religious-mixed society where humor and tolerance are needed.

Some will disagree with the list: On both sides of the aisle there are those, like me, worried about the size of our deficit – who recognize debt is an obligation, both financially and morally. Some on the Right might say that Trump Hate Syndrome has despoiled our politics. Others on the Left might claim that it has been Mr. Trump who is putting at risk our democratic institutions, including the Presidency and the Judiciary. Still others on the Left would include climate change, saying that mankind is destroying the Earth and that our time is limited, while the Right could point to the legions of Cassandras who wrongly predicted that mega-droughts and rising sea levels would bring famine and pestilence. But, in my opinion Trump is not the risk claimed, and hatred blinds the assessment of his opponents. As for those doomsayers, they have been hoisted on their own petard – the world has improved over the decade, in terms of poverty and the environment, at least in developed countries, which offer a map for developing countries.  

Nevertheless, what is troubling about these trends, if in fact they are trends, is that they offer bleak prospects for those of us – and our children and grandchildren – brought up within the wisdom from the Enlightenment that allowed freedom and democracy to blossom, which abetted economic growth that bettered standards of living, that provided moral teachings and the courage and certitude to differentiate right from wrong, good from evil – to defend the one and combat the other. Nevertheless, and to conclude on a positive note, the recent election in Taiwan and last weekend’s protests against the mullahs in Iran suggest that the desire for freedom is inherent, universal, alive and well.