Book: Fantasyland: How America Went Haywire: A 500-Year History

Fantasyland: How America Went Haywire: A 500-Year History was awesome. Given that Sears filed for Chapter 11 today, I’ll start with some perspective from 1976.

America is remarkably dynamic. Humans constantly create narratives about things and how they work. Suddenly, popular books are appearing, such as Sapiens: A Brief History of Humankind, that challenge the relevance of our narratives.

There is so much to reflect on when reading a book like Fantasyland or Sapiens. Pondering the meaning of life is an endless human pastime.

It’s particularly interesting in the context of the growth and development of a country, which in and of itself is a temporary construct, just like everything else.

I’ve always loved reading fantasy. And, after reading Fantasyland, I realize I’ve been living in it also.

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Book: The Fixer

I enjoyed Bradley Tusk’s new book, The Fixer: My Adventures Saving Startups from Death by Politics. It’s another memoir, a category which seems to be ending up on the top of my reading list a lot these days. It also was in the pile of books I get sent regularly by publishers hoping I’ll read and review them (as in “Dear Brad Feld, here is a form letter about my book, I hope you like it.”)

While I don’t know Bradley Tusk, I know of him, have heard him speak once, and like his first name. When I started reading The Fixer, I had no idea whether I’d end up engrossed, or end up turning the pages every 15 seconds as I skimmed through it looking for the good bits.

I was engrossed, at least for the first half. I started it on Monday night after dinner and got

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Voting

Today is primary day in New York State. The polls open at 6am and stay open until 9pm.

There are primary races for the Governor, Lieutenant Governor, and Attorney General as well as a bunch of statewide races for State Senate and State Assembly.

In NYC, and to a lesser extent in New York State, the primary can be the election as the city and state lean left.

So I encourage everyone in New York State to go out to the polls and vote today.

It all comes down to voting in a democracy. Marching feels great. Tweeting feels great. Polls make the news. But voting is the political action that really counts unless you can give gobs of money to candidates which most voters cannot and don’t do.

I plan to get to my polling place early on the way to an early start to the workday.

I always feel great

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The Judge Kavanaugh Hearing and Tech Policy

The circus that is going on in Washington isn’t too much of an actual hearing.  It’s a circus.  The votes are already counted and none of the Senators are going in with an open mind.   Senators are going in to advocate for or against entrenched positions or they are trying to feather their own political ambitions which is exactly what Cory Booker and Kamela Harris did Thursday.  They are both running for President in case you didn’t realize it.  By the way, Booker had his fundraising website go live prior to the hearing.  Cynical I know but you can’t be too cynical these days.

An aside, I disliked the stupid protestors during the hearings for justices nominated by President Obama and I dislike them now.  I am of the opinion that the room ought to be sealed against anyone from the public and the hearing simply televised.  A court Continue reading "The Judge Kavanaugh Hearing and Tech Policy"

The SEC Takes A Step In The Right Direction

The other day SEC chairperson Jay Clayton said he’d like to find a way for more private investors to gain access to private deals.  This is a good idea and it’s the first time the SEC has recognized that there is a disconnect between private and public markets which has occurred over the last ten to twenty years.  That disconnect has made it harder for average individuals to take risk and build wealth.

If we look at a lot of the money that is raised in crypto markets, I think some of it can be traced back to bad public policy.  When investors who want to invest are shut out of all opportunities, they manufacture their own. A friend told me some stories about crypto and how people who probably shouldn’t be trading it are trading it on their phones.  They work as laborers at a car wash.

On Continue reading "The SEC Takes A Step In The Right Direction"

Duty Honor Country

I was born at and spent a fair bit of my childhood at the United States Military Academy where my father taught engineering.

It’s a magnificent and beautiful place, full of history and meaning.

The motto of the academy, enshrined in its coat of arms, is “Duty Honor Country”.

In 1962, when I was less than a year old, General Douglas MacArthur came to West Point to accept the Sylvanus Thayer Award and gave the famous Duty Honor Country speech, in which he said:

“Duty, Honor, Country” — those three hallowed words reverently dictate what you ought to be, what you can be, what you will be. 

I am reminded of those words upon the passing of John McCain, a man who embodied them in the world of politics that is mostly bereft of them.

Though I did not vote for John McCain when he ran against Barack Obama in

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State Run Cryptocoins Don’t Work Better Than State Run Fiat Currency

Venezuela is in massive trouble.  The trouble and social unrest has been caused by what you might call “Democratic Socialism”.  Others might call it socialism or communism.  It’s bad public policy.  I was reminded of an event that happened 50 years ago today in 1968 and the Czech Republic.  Back then, Czechoslovakia was behind the Iron Curtain.  Soviet tanks rolled in to enforce “democratic socialism”.

There is a massive exodus of people out of Venezuela as they try to escape the extreme conditions.  They are going to neighboring countries like Columbia and Brazil.  Brazil is considering closing their border to the refugees.

Inflation in Venezuela is horrible. People are withdrawing cash as quick as they can.  I saw this article that they have established a state run cryptocurrency to stabilize the government fiat currency.  Their crypto coin is tied to the price of oil. So is their Continue reading "State Run Cryptocoins Don’t Work Better Than State Run Fiat Currency"

A Fair Share From Airbnb

I will be attending a press event today in NYC where Airbnb is announcing a $10mm program to support local efforts that improve the lives of New York State residents.

Airbnb calls this program A Fair Share and it estimates that the $10mm is just 10% of what a home sharing tax in New York State would produce for the city and state governments.

The $10mm in financial support is going to seven organizations. They are:

  • The New York Immigration Coalition

  • New York Mortgage Coalition

  • New York State Rural Housing Coalition, Inc.

  • Win

  • GMHC

  • CSNYC

  • Abyssinian Development Corporation

These are all organizations that benefit from city and state tax dollars but need to tap into the generosity of others to deliver their services.

Take CSNYC, where I am leading the $40mm CS4All private sector capital campaign to bring computer science education to every public school building in NYC. CS4All is

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Regulating and Legislating Tech and Tech Companies

More and more of the news around tech these days is about the relationship between technology companies and government. That was not the case a decade ago when regulators and elected officials took a largely hands off approach to technology, particularly the Internet, web, and mobile.

While I am not a fan of many of the moves that regulators and elected officials have made over the last few years, including the NYC City Council’s recent bills to clamp down on home-sharing and ride-sharing in NYC, I do believe that the tech sector and tech companies must engage with the public sector and they must do it earlier in their development.

It is hard to be an advocate for the tech sector and tech companies with the public sector, a role I play fairly regularly, when the companies in question have not been the best actors themselves.

The good news is

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Why It’s Time for Les Moonves to Go — You Can’t Charm Your Way out of Sexual Misconduct

I just returned from a week’s vacation in the mountains where I had almost no Internet access but was aware that Ronan Farrow had published a damning sexual misconduct article about Les Moonves, the Chairman & CEO of publicly traded company CBS Corporation.

Now home, I finally had the chance to fetch the New Yorker from my mailbox and read the article in its entirety and it’s clear to me that Les Moonves needs to go and no doubt will go in the near future. You should read Ronan Farrow’s article and decide for yourself but I remain thankful that investigative reporters continue to shine a spotlight on leadership in America — whether in government or private enterprise.

The summary of Ronan’s article is that Les Moonves made unwanted advances to actresses, writers and producers. These weren’t simply flirtations — he forcefully kissed and groped women, forced his hands up skirts, locked and blocked doors and made direct comments about the need to have sex with him. In addition to these fireable offenses he also clearly blocked women’s careers who resisted his overtures.

But couldn’t this just be a case of “he said, she said” or disgruntled employees seeking revenge on a powerful man?

No. There are four named individuals in the story, each risking careers by publicly speaking up. For each witness there are several friends who corroborated that the stories were repeated to them at the time they occurred and have been recounted over the years. The stories bear very similar approaches. There were also two women who spoke off-the-record but whose stories were also heavily fact-checked by the New Yorker and they cited 30 sources including both existing and former employees inside of CBS in their overall reporting.

It’s time for Les Moonves to go.

If you read the Moonves story and also the harrowing accounts from Ronan Farrow’s story on Harvey Weinstein there are many similarities. They both abused their power, they both apparently traded potential career advancement for sexual relations and retaliated when rebuffed. They both found ways to invite women into private office space after staff had cleared out and they both offered alcohol to women to encourage the situation.

So why is Harvey Weinstein portrayed as a monster while Les Moonves is in power? For starters Weinstein is an overweight, unlikeable, gruff man who many are repulsed by and was reportedly always un-liked by many in the industry. Les Moonves comes across on the surface as one of the most charming and likable guys in the entertainment industry. Moonves was seen as a leader and somebody who built careers and was a mentor and a champion to many. Weinstein was seen as an outsider who few liked and who

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Airbnb and NYC

There is a bill in front of the NYC City Council called Intro 981 that will impose reporting requirements on Airbnb and their hosts in NYC. There will be a public debate on that bill this coming week.

The backdrop here is the growing housing affordability crisis in NYC and the idea that Airbnb is a significant contributor to it.

While I am not an expert in the economics of housing, I have lived in NYC for the past thirty-five years (my entire adult life), and my wife and I are also landlords in several of the neighborhoods in Brooklyn where rents have been rising most quickly. I have a layman’s understanding of the issue and an on the ground feel for it.

It is my view that we have a fundamental supply and demand problem at work in the rapidly gentrifying outer boroughs of NYC (most acutely in Brooklyn,

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Did The Supreme Court Just Save Brick and Mortar Retail?

Yesterday in a momentous 5-4 decision, the Supreme Court of the United States overturned a precedent and made new law.  It will have reverberations around the country.  It could help Megalytics, a startup our fund is invested.

The precedent they overturned was known as the “Quill” case.  Ironically, it involved a good friend of mine Steve Miller.  Steve started and runs Origin VC here in Chicago.  His family had started Quill and states wanted them to collect local and state sales taxes from customers when they sold in areas where they didn’t have a physical presence.  At the time it was really arduous to collect those sorts of taxes and would have increased the costs to the company making it extremely difficult even to execute the business.  Quill’s case paved the way for internet ecommerce.

Back then, the nascent internet technology hadn’t taken hold.  Most over the border commerce Continue reading "Did The Supreme Court Just Save Brick and Mortar Retail?"

The Parent Child Relationship

It is fathers day today. And I thought I’d write a bit about something that is really bothering me.

I’ve come to terms with a lot of what is going on in the US federal government and our political system. I see it as a natural swinging of the pendulum. Many on the right think we went too far left under Obama. Many on the left think we have gone too far right under Trump. In time, Trump will be history and we will undo all of this nonsense he is putting in place. So is the way of politics and government and every time something happens in DC that bugs me, I think “this too shall pass.”

But, this policy of separating children from their parents at the border really bugs me. The NY Times has a good report up on their homepage right now about how we got

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Taxation Of Carried Interest

The issue of how to tax carried interest, the profit sharing interests that VCs, Private Equity firms, and Hedge Funds receive as compensation for generating returns to their investors, is in the news again.

This time it is not a debate at the Federal level, but at the state level. There are carried interest taxation bills under discussion in California, Illinois, Maryland, New Jersey, New York, Rhode Island, and possibly other states that I am not aware of.

My view on this issue is simple and I’ve stated here publicly and regulary since mid 2007.

If you are being paid a fee for managing other people’s money and have no capital at risk on the carried interest, I don’t understand how it can be considered a capital gain.

It may be good economic policy to incentivize people to manage other people’s money and maybe there should

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Regulation and The Retail Investor

One of the things that came out of the lunch we did at the University Club the other day was the focus of the SEC. There are several agencies and independent organizations that regulate finance and the SEC is at the top of the pyramid.

I have spoken to both SEC and CFTC regulators on cryptocurrency. They seem to be working together and are not engaged in turf battles. Right now, they say that’s the case and you have to take them at their word. In past engagements, like the CFMA Re-authorization in 2000, it was a brutal bare knuckle battle between agencies and the industries they regulated.

Here are a couple generalizations.

When we think about markets the CFTC regulates, they are not targeted to retail investors. They exist for the risk management and risk transfer of professional investors and big time industrial organizations. That requires a different touch Continue reading "Regulation and The Retail Investor"

Entitlements Consume The Federal Budget, Not Defense

There is a misnomer out there about government budgets. They don’t work like a family budget. Politicians have used the family budget to try and illustrate how off the rails government budgets are. However, families can’t really sell bonds and tax the way governments can.

When you hear that someone “cut the budget”, most people assume that spending is going down. Usually with governments it means the rate of spending has gone down. It might have been budgeted to go up at a rate of 5% but now is only going up at 2%. The spending is still going up.

I remember seeing Mary Meeker’s slide deck on the future of the internet a few years ago. It’s always full of a lot of information that might help you build some correlations or opinions on things. One slide stood out to me. It was that entitlements consumed over 60% of

Continue reading "Entitlements Consume The Federal Budget, Not Defense"

Entitlements Consume The Federal Budget, Not Defense

There is a misnomer out there about government budgets. They don’t work like a family budget. Politicians have used the family budget to try and illustrate how off the rails government budgets are. However, families can’t really sell bonds and tax the way governments can.

When you hear that someone “cut the budget”, most people assume that spending is going down. Usually with governments it means the rate of spending has gone down. It might have been budgeted to go up at a rate of 5% but now is only going up at 2%. The spending is still going up.

I remember seeing Mary Meeker’s slide deck on the future of the internet a few years ago. It’s always full of a lot of information that might help you build some correlations or opinions on things. One slide stood out to me. It was that entitlements consumed over 60% of

Continue reading "Entitlements Consume The Federal Budget, Not Defense"

Trump, Irrationality and Game Theory

I have been openly critical of Trump as a president going back to before the election. While I want radical change I do not believe the price for this ought to be going backwards on foundational issues such as the rule of law, press freedom and science. Nonetheless it has been fascinating to observe how Trump’s potential or actual irrationality has opened the door for progress on some issues that were previously deemed intractable, such as North Korea.

It is well known that even in relative simple games, such as repeated prisoner’s dilemma the set of sustainable equilibria grows significantly when there is some possibility of at least one of the actors being irrational (some of the time). In this regard, Trump is a stark contrast to his predecessors such as Obama, Clinton and the Bushes who cultivated an image of themselves as rational actors. For an opponent such as Continue reading "Trump, Irrationality and Game Theory"

Trump, Irrationality and Game Theory

I have been openly critical of Trump as a president going back to before the election. While I want radical change I do not believe the price for this ought to be going backwards on foundational issues such as the rule of law, press freedom and science. Nonetheless it has been fascinating to observe how Trump’s potential or actual irrationality has opened the door for progress on some issues that were previously deemed intractable, such as North Korea.

It is well known that even in relative simple games, such as repeated prisoner’s dilemma the set of sustainable equilibria grows significantly when there is some possibility of at least one of the actors being irrational (some of the time). In this regard, Trump is a stark contrast to his predecessors such as Obama, Clinton and the Bushes who cultivated an image of themselves as rational actors. For an opponent such as Continue reading "Trump, Irrationality and Game Theory"