Game, set, match, McConnell

Let’s start be admitting that this whole business is 100% politics. It’s inside the beltway bullshitters doing what they do best.

The senate has long had rules which allowed a group of senators who wished to avoid a vote on a particular motion to continue debate on that motion. The term for this action, filibuster, comes from a dutch word which means “pillaging and plundering adventurer”. A group of only 40 senators can prevent a vote to close debate on a motion, even though it would take 51 senators to defeat a motion in a vote on the merits. The filibuster allows this relatively small group of senators to steal a motion from having a vote, effectively killing the motion.

In November 2013, Harry Reid, then Senate Majority Leader, changed the long standing rules of the senate so that only a majority of votes were required to bring cloture on debate for federal judiciary nominees and executive-office appointments. Supreme Court nominees were excluded from the rule change. The pressing issue was the confirmation of three Obama nominees to the U.S. Court of Appeals for the District of Columbia Circuit.

Senator Reid declared that the chamber “must evolve” beyond parliamentary roadblocks. “The American people believe the Senate is broken, and I believe the American people are right,” he said, adding: “It’s time to get the Senate working again.”

Then Senate Minority Leader Mitch McConnell whined “It’s a sad day in the history of the Senate,” calling the move a Democratic “power grab.”

In March 2016, with the Senate now under Republican control, President Obama nominated Merrick Garland to fill the Supreme Court vacancy created by the death of Justice Antonin Scalia. Senate Majority Leader Mitch McConnell, who had clearly been itching for revenge, immediately said that the Senate would not act on the nomination until after the presidential election.

When Donald Trump won, Merrick Garland had no chance for confirmation. Sure enough, President Trump nominated Neil Gorsuch to the Supreme Court. Chuck Schumer, who has replaced the retired Harry Reid as Senate Minority Leader, had whipped enough Democratic votes to filibuster a vote on Gorsuch.

Mitch McConnell completed his gambit by changing the Senate rules to eliminate the filibuster for Supreme Court nominees, and Gorsuch was quickly confirmed. Today, Gorsuch was sworn in as an Associate Justice of the Supreme Court.

“This is the latest escalation in the left’s never-ending judicial war, the most audacious yet,” Mr. McConnell said, after describing Democratic opposition in the past to Judge Robert H. Bork and Justice Clarence Thomas. “And it cannot and it will not stand. There cannot be two sets of standards: one for the nominees of the Democratic president and another for the nominees of Republican presidents.”

“When history weighs what happened, the responsibility for changing the rules will fall on the Republicans’ and Leader McConnell’s shoulders,” said Senator Schumer. “They have had other choices,” he added. “They have chosen this one.”

The saddest part of this game is that the quotes from our elected leaders are interchangeable. Their political positions are determined by convenience and circumstance, not principle.

Reid got three liberal justices on the D.C. Circuit court. It’s an influential court because they review decisions and rule making by most federal agencies. McConnell got a 49 year old conservative justice on the Supreme Court. As it stands today, I think McConnell came out ahead.

However, we don’t yet have the final score, and it’s all upside for McConnell. The leader of the court’s liberal wing, the Notorious RBG (a.k.a. Ruth Bader Ginsburg) is now 84 years old, and Stephen Breyer is 78. Justice Kennedy, the current swing vote on the court, is 80. If one or more of these justices retires or dies while Trump is still in office and the Senate is still under Republican control, the Supreme Court will be heavily conservative for an entire generation.

Game, set, match, McConnell.

Who Is A Sportswoman

Silvia Camporesi, an assistant professor in bioethics and society at King’s College London, writing for Aeon: Who Is A Sportswoman?

Why seek out – or at least wilfully [sic] ignore – biological variations that confer advantage across a wide range of skills while penalising women for more testosterone? Why single out hyperandrogenism as the only variation that confers an unfair advantage in sport?

Silvia argues the fundamental unfairness of requiring women with high testosterone levels to have suppression therapy in order for them to compete as a female. She is right. She also acknowledges that while a woman with high testosterone levels is allowed to compete with the men, they are generally not competitive. Her proposed solution:

To move forward, we must err on the side of inclusivity, and consider an athlete a woman when she is legally recognised as such.

In most sports, there is a meaningful gap between the male world records and the women world records. If the International Olympic Committee adopted Sylvia’s proposed approach, China would legally declare their second tier male athletes to be women, and they would win every medal in the women’s events.

Therein lies the problem: everyone agrees the current method is unfair, and nobody can come up with a better method.

Eric Holder won’t change anything at Uber

Last week Susan J. Fowler wrote a scathing blog post about her time working at Uber. She alleges sexual harassment is rampant at Uber, and her story seems quite compelling. Susan is not the first person to make such allegations, but for some reason her story got a lot of play. Slate wonders if Uber can ever reform itself, the firm has a long history of these kinds of allegations and other bad behavior.

Uber has retained former attorney general Eric Holder to work with Arianna Huffington, who sits on Uber’s board, to investigate these allegations.

Eric Holder is the only sitting member of the Cabinet to be held in contempt of Congress for refusing to turn over documents related to the Fast and Furious scandal. In case you forgot, the ATF field offices in Arizona instructed licensed firearms dealers to sell guns to straw purchasers (which is a felony), with the hopes that they could track the guns to Mexican drug cartels. More than 2,000 guns were allowed to be sold during this initiative, only 710 of them have been recovered, and there have been no arrests of high level cartel members as a result of the operation. These tracked weapons were found at many crime scenes on both sides of the US-Mexico border, and several were found at the crime scene where Border Patrol Agent Brian Terry was killed.

Uber wants it to look like they really care about fixing their toxic culture, but the guy they hired has a history of breaking the law to protect his boss. If Uber really wanted things to change, they would have selected someone else to lead this investigation.

The beginning of the end of Obamacare

It doesn’t matter whether Republicans can repeal Obamacare or not. The program as currently architected is going to fail. Humana just announced they are pulling out of all of the exchanges for 2018. Aetna’s CEO, Mark Bertolini says that Obamacare is in a death spiral as healthier consumers are driven out of the exchanges by higher premiums, which in turn makes the premiums go up. For 2017, Aetna already scaled back the number of states where they are participating in the insurance exchanges. I expect that unless Congress implements a new plan, the insurance exchanges as currently architected will be toast by 2019. Seems like a long ways away, but since payers have long lead times to decide whether to participate, I expect we will know for sure sometime in the spring of 2018. That’s little more than a year away.

Vera Rubin and Dark Matter

Vera Rubin first noticed the galaxy rotation problem, where the math that calculates the angular motion of galaxies does not match the observed path of those galaxies. After some modifications and alternatives to Newton’s laws did not fit the evidence, she developed the theory of dark matter. This theory describes many astronomical observations and is widely accepted by the astronomical community.

Vera Rubin passed away on Dec 25, 2016 at age 88.

Predatory Drug Pricing, Courtesy of Congress

The Senate Special Committee on Aging just released a report on drug pricing, which contains scathing criticism of the “hedge fund model of drug pricing”.

“The skyrocketing prices of prescription drugs affect every American family, particularly our seniors,” said Chairman Collins. “This report is the culmination of the Senate Aging Committee’s year-long, bipartisan investigation into the egregious price increases on a number of decades-old drugs acquired by pharmaceutical companies that act more like hedge funds. We must work to stop the bad actors who are driving up the prices of drugs that they did nothing to develop at the expense of patients just because, as one executive essentially said, “because I can.”

“The hedge fund model of drug pricing is predatory, and immoral for the patients and taxpayers who ultimately foot the bill—especially for generic drugs that can be made for pennies per dose,” Ranking Member McCaskill said. “We’ve got to find ways to increase competition for medicines and ensure that patients and their families aren’t being gouged.”

In fact, our esteemed Senators and Representatives have actually passed legislation that enables and encourages this behavior. The Secretary of Health and Human Services, who writes the checks for $646 billion dollars of annual Medicare spending, is prohibited by statute from negotiating drug prices with pharmaceutical manufacturers. This means that whatever the drug company wants to charge, Uncle Sam and our seniors have to pay.

Chairman Collins of Maine and Ranking Member McCaskill of Missouri, instead of a meaningless press conference full of whining, how about you introduce bipartisan legislation to allow the Department of Health and Human Services to negotiate drug prices. They are the single largest purchaser of healthcare products and services in the country. If HHS were able to negotiate, then there would be no incentive for so-called bad actors (which are really just savvy business people) to play this game.

Winners, losers, and observations

Loser: Big Donors. According to Federal Election Commission disclosures, Hillary’s committee raised twice as much as Trump’s committee. Outside money was tilted 3:1 in favor of Hillary. Clinton raised almost $12 million from pharmaceutical companies, Trump raised $163,876. Clinton raised $14 million from real estate firms, Trump raised $2.5 million. Hang on, I thought Trump was a real-estate tycoon! Clinton pulled $36 million from law firms, Trump got less than $1 million. Buckle up, it gets worse. Clinton received $56.6 million from hedge funds and private equity firms, and Donald Trump was only given $242,995. There were 10 other republican candidates who each received more from hedge funds than Donald Trump did. Big donors have less influence over, oops, that’s illegal access to the president than they have had for a long time.

Loser: Hollywood. Apparently regular people don’t put much stock in what Hollywood thinks, even though we do like their sex and violence enough to buy lots of five dollar sodas. The list of stars who endorsed Clinton is very long, and includes: George Clooney, Kim and Kanye, Robert DeNiro, Matt Damon, Jessica Alba, Harvey Weinstein, Lena Dunham, Lady Gaga, Jamie Foxx, Tom Hanks, Brittney Spears, Katy Perry, Amy Schumer, Demi Lovato, 50 Cent, Amy Poehler, J.J. Abrams, Steven Spielberg, Jeffery Katzenberg, and everyone else who lives in a mansion in the Los Angeles hills. Trump got a handful of C-list (because they couldn’t even make the B-list) celebrities like Mike Tyson, Kid Rock, Wayne Newton, Mike Ditka, and Jesse Ventura.

Loser: Democratic Party. One candidate is experienced, but unlikeable. Her family foundation took donations from foreign governments while she was Secretary of State which is at least unethical and probably illegal, and the FBI declared she was extremely careless in handling our nations’ secrets. The other presidential candidate from the party is a socialist. Trump’s stance on protectionism appears to have cost you the union vote. In 2012 Obama won every state in the rust belt except Indiana. In 2016, Clinton lost every state in the rust belt except Illinois. For only the second time since 1929, Republicans now control the House, the Senate, and the Presidency. There is already one vacancy on the supreme court, with the potential for several others in the coming presidential term (Ginsburg is 83 years old, Kennedy is 80, Breyer is 78). There’s always the filibuster, but wait, in 2013, then Senate Majority Leader Harry Reid exercised the nuclear option by changing the senate rules to eliminate filibusters for federal judicial nominees and executive office appointments. Doesn’t apply to the Supreme Court, but I’ll bet you wish you had that back now.

Winner: Mitch McConnell. In February 2016, the death of Anton Scalia left a vacant seat on the Supreme Court. Within a week, Mitch McConnell made it clear that even though there were 11 months left in the Obama presidency, no hearings on nominees would be held until after the inauguration of the new President. A few weeks later, Obama tried to call McConnell’s bluff by nominating Merrick Garland, a centrist who is emminantly qualified for the job. McConnell didn’t blink, and has kept the Senate in session since then to prevent a recess appointment. There have been no hearings, and no backlash against Republicans.

Loser: Republican Party. Although Trump was on the Republican ticket, we just elected a guy who isn’t a Republican. He’s a Trumpist. Nobody really knows what this means yet, but I think it’s pretty hard to over-estimate the impact.

Winner and Loser: Twitter. Trump didn’t need to buy TV commercials, because every time he tweeted something it ended up on TV. Not only was it good for Trump, it’s amazing for Twitter. No other company in the history of the world, with the possible exception of Google, gets that kind of free brand awareness. Everybody else spends billions of dollars to build and maintain a brand. Even with all that wind in the sails, Twitter doesn’t have a viable business model and nobody wants to buy them.

Winner: Paul Ryan. The country’s wonkiest policy wonk is now working with a president with no policy experience. I fully expect Mr. Ryan to fill that empty vacuum with big policy initiatives like tax reform and entitlement reform, which he calls an anti-poverty initiative.

Loser: Clinton Foundation. One of the Foundation’s key products, political influence, has been rendered useless. I expect the purchasers of that product donations to the foundation will dramatically shrink. Which is too bad, because the Foundation’s other product, charitable work, is pretty good. Hillary seems in the clear (for now) on the email scandal, but rumors are circulating the FBI was building a case against the Foundation and it was squashed by the Justice Department. I predict we will be hearing more about this after the inaguration and we get a new sheriff in town.

Complicated: Joe Arpiao. Sheriff Joe, the only nationally known sheriff, and certainly the most controversial, loses his bid for a 7th term. He has been in office since 1993. Styling himself as Americans toughest sheriff, he required inmates to wear pink underwear and broadcast opera music for the trustees enjoyment. In 2010 he agressively enforced Arizona’s SB1070 anti-illegal immigrant law, and continued enforcement after the Supreme Court struck the law down. He has been accused of abuse of power, improper clearance of cases, and unlawful enforcement of immigration laws. Maricopa County taxpayers have spent $142 million dollars on legal expenses, settlements, and court awards for cases involving Arpiao or his office. In addition to being supervised by a Federal Court monitor, criminal contempt of court charges were filed two weeks ago because Arpaio continues to violate court orders. Arpaio lost to Democrat Paul Penzone, but Maricopa County, which includes the entire Phoenix metro area, voted for Trump.

Loser: Newspapers and their endorsements. Of the top 100 newspapers (ranked by circulation) in the country, 15 didn’t endorse anybody. 71 endorsed Hillary Clinton, and another 5 endorsed “Not Donald Trump”. Gary Johnson got 5, and Trump brought up the rear with 3. Clearly these endorsements were out of touch with the newspapers’ subscribers, and they didn’t seem to influence anybody. Most current high school freshman, who will be eligible to vote in the next presidential election, have never read a newspaper and couldn’t name one if their life depended on it.

Loser: Pollsters. First a dumb question, are people who answer the phone at dinner time and spend 10 minutes talking with a stranger representative of all voters? Nevermind. Let’s continue to ignore methodology, oversampling, and margin of error. We didn’t care about any of that last week week, why should we start now? In the top 10 battleground states, the pollsters had the wrong winner in Florida, Michigan, North Carolina, Pennsylvania, and Wisconsin. Any idiot can predict who will win in California and Wyoming. For the close races, I can flip a coin and do as well as the pollsters. Nate Silver, who seems to have lost his gift for separating the signal from the noise, published a chart showing where polls missed the most. In only one out of sixteen states in Silver’s chart did Clinton outperform the polls. Trump outperformed in twelve. But hey, they got the popular vote right, does that make up for it?

Winner: Marijuana. California, Massachusetts, Maine, and Nevada make it legal for anyone over 21 years old to smoke pot. Ballot initiatives in Arkansas, Florida, and North Dakota pass making it legal for doctors to prescribe medical marijuana to their patients.

Most Suprising: Latino vote. Trump bloviated that he would build a wall between the US and Mexico and deport all undocumented immigrants. He made racist statements that a federal judge of Mexican heritage was not qualified to rule from the bench. In spite of all this, he received a larger share of Latino votes than Mitt Romney did in 2012.

Winners: Rudy Guliani, Newt Gingrich, and Jeff Sessions. These early Trump supporters seem certain to receive cabinet appointments.

Too early to call: Chris Christie. Probably broke the law in the New Jersey bridge scandal, the aftermath of which caused him to drop out of the presidential race. He threw his support behind Trump after the New Hampshire primary, and has been leading Trump’s transition team. Last week members of his staff were found guilty on multiple counts of conspiricy and fraud. During the trial, both the prosecution and the defense argued that Christie knew of his associates’ involvement in the plot. In the next few weeks, we’ll know how much scandal Trump wants to drag into the White House with him.

Big Winner: Populism. The most exciting candidate, Bernie Sanders, and the winning candidate, Donald Trump, both tapped into a populist vein of sentiment in the electorate. The establishment parties are in shambles. Populism is bigger than either Sanders or Trump, and it requires neither of them to continue growing. I’m sure both parties are headed to the Halloween store looking for populist costumes. The party willing to walk away from big banks, big donors, big everything, will be the party of the future.

Loser: Barack Obama. In the last few months, the President and First Lady both campaigned hard for Hillary Clinton. But what they were really campaigning for was their own legacy. Already in a death spiral of rapidly increasing premiums and now without veto protection, Obamacare will certainly be repealed or significantly overhauled. Since the president had no chance of getting two-thirds of the senate to go along with the Iranian nuclear treaty, he called it a “deal” and went ahead anyway using executive authority. Under the political arrangement, which also required us to give the Iranians an airplane full of cash, Obama suspended the economic sanctions which were approved by Congress in 1996 and strengthened in 2013. If Trump instructs his Department of State and Department of Treasury to begin enforcing those sanctions, which he has said he will do, the whole multi-lateral deal will likely fall apart. With Clinton in the White House, Obamacare and the Iran deal likely stand. Without Clinton, Obama’s major domestic and foreign policy accomplishments will not survive.

Too early to call: Trump. He won the election but campaigning and governing are very different. He had no experience with either, and his campaign was a disaster. On the other hand, everyone who has underestimated Trump has lost. Trump is a rabid dog who barks loudly while chasing the bus down the street. Last night the dog caught the bus and sunk his teeth into one of those tires. Now what?

Winner: Hillary. This morning in her painful and heart-felt concession speech, she said:

And to all the women, and especially the young women, who put their faith in this campaign and in me: I want you to know that nothing has made me prouder than to be your champion.

Now, I know we have still not shattered that highest and hardest glass ceiling, but someday someone will — and hopefully sooner than we might think right now.

And to all of the little girls who are watching this, never doubt that you are valuable and powerful and deserving of every chance and opportunity in the world to pursue and achieve your own dreams.

I’m going to show the video of this speech to my 13 year old daughter who wants to work at SpaceX. Hillary has inspired an entire generation of women.

Finally. The election is over. In spite of terrible candidates and a horrific campaign, two things happened this week that gave me hope.

On Friday, President Obama was speaking at a Hillary Clinton rally in North Carolina. During his speech, an older gentleman wearing a military uniform stood up and waved a big Trump sign. First of all, that’s pretty gutsy, and yes, security escorted him from the premises. The crowd booed and jeered so loudly that the President had to stop his speech, and it took him a couple of minutes to calm everybody down. Then he said:

First of all, we live in a country that respects free speech. Second of all, it looks like he maybe might have served in our military, and we gotta respect that. Third of all, he was elderly and we gotta respect our elders. And fourth of all, don’t boo, vote.

Amidst all the rancor, a glimmer of civil discourse.

The second thing happened last night. Trump’s acceptance speech was markedly different than any other speech of his I’ve ever heard. He pledged to be the President for all Americans, and promised to work to bridge the divide between the parties. Let’s hold him to it.

“Hope is being able to see that there is light despite all of the darkness.”
– Desmond Tutu

Smartphone Winners

Investor’s Business Daily says Apple grabs 104% of smartphone profits. How can someone get more than 100% of the profits? Many players lost money.

Strategy Analytics research shows Android capturing 88% of global smartphone shipments.

Apple and Google are the winners in the smartphone war. Samsung was a respectable competitor, but I’m not sure their brand will be able to recover from the Galaxy Note 7 debacle. Individuals are subject to criminal prosecution for bringing a Galaxy Note 7 on board an aircraft, and on flight attendants announce the devices are banned because they can catch fire.

Compare the current state with this chart from 5 years ago. Everyone else in this segment has failed, loses money, or is an insignificant player: Lenovo/Motorola, LG, HTC, Microsoft, Xaomi, Kyocera, HP/Palm, Nokia, Blackberry.