Category: Wealth Tips

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Gmail Users Warned About New Account Takeover Scam: Here’s What To Look For

Garry Tan, chief executive of prominent tech-oriented venture capital firm Ycombinator, wrote on X late last week that there is a “pretty elaborate” phishing scam that uses an AI-generated voice.

The scammers “[claim] to be Google Support (caller ID matches, but is not verified),” he wrote in an Oct. 10 post that he termed a “public service announcement.”

“DO NOT CLICK YES ON THIS DIALOG—You will be phished.

“They claim to be checking that you are alive and that they should disregard a death certificate filed that claims a family member is recovering your account. It’s a pretty elaborate ploy to get you to allow password recovery.”

IT consultant Sam Mitrovic, in a blog post last month, wrote of a similar scam attempt targeting Gmail accounts and also using an AI-generated voice.

“The scams are getting increasingly sophisticated, more convincing and are deployed at ever larger scale,” Mitrovic wrote in the post. “People are busy and this scam sounded and looked legitimate enough that I would give them an A for their effort. Many people are likely to fall for it.”

https://www.zerohedge.com/technology/gmail-users-warned-about-new-account-takeover-scam-heres-what-look

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Why Price Controls Should Stay in the History Books

KEY TAKEAWAYS

  • As inflation rises, some have called on the government to impose price controls. But such controls have significant costs that increase with their duration and breadth.
  • Prices allocate scarce resources. Price controls distort those signals, leading to the inefficient allocation of goods and services.
  • Appropriate fiscal and monetary policies can reduce inflation without the costs imposed by price controls.

The burst of inflation that followed the COVID-19 crisis and the expansionary policy of international central banks, including the Federal Reserve, has returned the topic of price controls to the news. For example, recent articles have advocated forms of price controls to reduce U.S. inflation and achieve other goals.1

This article reexamines price controls, discussing their history, operation and disadvantages, and economists’ views on the policy. It explains why most economists believe broad price controls to be costly and ineffective in most situations.

U.S. PCE Inflation Is at Its Highest since 1982

U.S. PCE Inflation Is at Its Highest since 1982

SOURCE: FRED (Federal Reserve Economic Data).

Price controls are government regulations on wages or prices or their rates of change. Governments can impose such regulations on a broad range of goods and services or, more commonly, on a market for a single good. Governments can either control the rise of prices with price ceilings, such as rent controls, or put a floor under prices with policies such as the minimum wage. The following table shows some examples of common price controls.

Types of Price Controls
Ceilings Rent control
Price controls on necessities: food/gasoline
Price controls on food, water or building materials after a disaster
Drug price controls
Floors Minimum wage

The History of Price Controls

Price controls have a long history: The Code of Hammurabi prescribed prices for goods 4,000 years ago, and the Massachusetts and Virginia colonies did likewise 400 years ago.2 Governments have commonly restricted prices during wartime, with all major belligerents instituting broad limits on prices during World War II. Western countries commonly employed broad price controls into the 1970s. The U.S. government last used broad controls in a series of schemes from 1971-74 following the withdrawal of the dollar from the gold standard. Many developing countries control the prices of staples, sometimes combining price controls with subsidies.

The Impact of Price Controls

Let’s consider the impact of price ceilings. High prices have two economic functions:

  • They allocate scarce goods and services to buyers who are most willing and able to pay for them.
  • They signal that a good is valued and that producers can profit by increasing the quantity supplied.

That is, prices allocate scarce resources on both the consumption and production sides. Price controls distort those signals.

The next figure shows a stylized supply-demand graph for a competitive market in which the equilibrium price-quantity pair would be defined by the point at which the supply and demand curves cross, at {PE, QE}. In the presence of the price ceiling, however, consumers want QD units, while the suppliers are willing to offer only QS units. QD is much greater than QS and the difference is a shortage of the product (Q) at the price ceiling.

Supply and Demand With Price Ceiling

The next figure similarly shows how a price floor, such as a minimum wage, changes the equilibrium {price, quantity} combination in a competitive market. In this figure, the price floor produces a glut of supply—for example, unemployment in the case of a minimum wage.

Supply and Demand with a Price Floor

Supply and Demand with a Price Floor

SOURCE: The author.

Costs of Price Controls

Price controls have costs whose severity depends on the broadness of the control and the degree to which it changes the price from the free-market price. The costs include the following:

  • A government bureaucracy and law enforcement must be funded to enforce the controls.
  • Goods and services are allocated inefficiently, both in consumption and production.
  • Competition shifts from production to political markets as firms attempt to influence price-setting decisions.
  • Widespread evasion of price controls promotes disrespect for the law.
  • Suppressed inflation appears when temporary controls are relaxed.

Most of these costs are straightforward, but allocative inefficiency requires some explanation: Because QD is greater than QS in the second figure, there is a shortage of the product, and sellers must figure out how to allocate a limited supply. Perhaps they sell only to longtime customers or customers who also buy other products, or they just limit the quantity that each customer can buy.3 Rent control forces landlords to keep renting to existing tenants at artificially low prices. Such “non-price rationing” is inefficient because some buyers who don’t get the good would be willing to pay more for them. Producers would be willing to increase production and sell to consumers who want to buy at a higher price, but price controls make that illegal.

How Do People and Firms Evade Wage and Price Controls?

When a price ceiling prohibits a desired transaction, the buyer and seller will often evade the price ceiling by transacting in a closely related but unregulated product or by trading illegally in black markets. Similarly, sellers might change a good slightly to prevent it from being subject to the same price limit. The economist Hugh Rockoff notes that the price of clothing has been particularly difficult to control because an article of clothing can be upgraded easily to a higher-priced category by adding inexpensive decoration or reduced in quality by substituting cheaper materials.

The historian Jennifer Klein has documented that the current dependence of the U.S. health care system on employer-provided insurance is a relic of the evasion of wage controls during World War II. During that conflict, defense industries wanted to hire more workers but could not legally raise wages. To make their jobs more attractive, some employers began offering health insurance as a legal fringe benefit.

Price controls prompt greater behavioral changes in the long run. Consider how firms might respond to a higher minimum wage that increases the cost of entry-level labor. In the short run, employers might raise prices and economize on labor. Firms will tend to raise prices, even in a competitive market, because producers must pay higher wages to their employees. People will consume less of the higher-priced products that use entry-level labor intensively. In the longer run, employers will install more capable machines, such as dishwashers or automated cooking machines, to reduce the quantity of entry-level labor they use.

What Do Economists Think about Price Controls?

Economists generally oppose most price controls, believing that they produce costly shortages and gluts. The Chicago Booth School regularly surveys prominent economists on questions of interest, including price controls. Most economists do not believe that 1970s-style price controls could successfully limit U.S. inflation over a 12-month horizon, and many of those economists cite high costs of controls.

Economists do know, however, that price controls can be theoretically beneficial when imposed appropriately on a monopolist or monopsonist, and they do tend to work better in imperfectly competitive markets.4 The economist Hugh Rockoff cautiously suggests a limited role for price controls during some inflation episodes in his book Drastic Measures: A History of Wage and Price Controls in the United States. Rockhoff reported that even the late Milton Friedman, a noted free-market advocate, accepted a limited role for temporary price controls in breaking inflation expectations during a disinflation.

Conclusion

Price controls have had a very long but not very successful history. Although economists accept that there are certain limited circumstances in which price controls can improve outcomes, economic theory and analysis of history show that broad price controls would be costly and of limited effectiveness. Appropriate fiscal and monetary policies can reduce inflation without the costs imposed by price controls.

References

  • Klein, Jennifer. For All These Rights: Business, Labor, and the Shaping of America’s Public-Private Welfare State. Princeton University Press, 2010.
  • Rockoff, Hugh. “The Response of the Giant Corporations to Wage and Price Controls in World War II.” The Journal of Economic History, March 1981, Vol. 41, pp.123-128.
  • Rockoff, Hugh. Drastic Measures: A History of Wage and Price Controls in the United States. Cambridge University Press, 2004.
  • Schuettinger, Robert; and Butler, Eamonn. Forty Centuries of Wage and Price Controls: How Not to Fight Inflation. The Heritage Foundation, 1979.

Endnotes

  1. See Isabella Weber’s Dec. 29 opinion piece in the Guardian and Eric Levitz’s Jan. 2 article in New York Magazine.
  2. The book Forty Centuries of Wage and Price Controls: How Not to Fight Inflation, written by the economists Robert Schuettinger and Eamonn Butler, discusses the historical examples in this article and is highly critical of price controls.
  3. In command economies, such as the former Soviet Union, consumers must commonly spend hours standing in line to buy scarce goods and services.
  4. A monopolist is the sole seller of some product, while a monopsonist is the sole buyer of some product. Monopolists will generally sell less output than would be sold by many competitive firms and for a greater price. If the government caps the price at which a monopolist may sell, it will sell a greater quantity at the lower price. Similarly, if a monopsonist is forced to buy for a higher price, it will do so and buy a greater quantity. Some economists argue for a minimum wage on the basis that the employment market is imperfectly competitive so the minimum wage can potentially increase both wages and employment. Other policies, such as subsidies and taxes, can also be used to make imperfectly competitive markets behave more like competitive markets.

https://www.stlouisfed.org/publications/regional-economist/2022/mar/why-price-controls-should-stay-history-books

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MEI – Merit, Excellence, Intelligence

Alexandr Wang

Yet another great piece from Robert W Malone MD MS.

Silicon Valley experienced an earthquake on June 13, 2024. This geological event was definitely not televised, but it triggered aftershocks from progressive corporate media like Fortune magazine (which, in a typical propaganda move, cites unnamed “experts” in its reporting on the topic). The earthquake was a consequence of the widespread excesses and consequences of the DEI (Diversity, Equity and Inclusion) hiring and promotion policies that have been actively promoted by the World Economic Forum and its leading corporatist sponsors including Blackrock, Vanguard, State Street and World Economic Foundation (WEF) favored consulting group McKinsey & Company.

To advance and enforce their DEI agenda, which plays a key role in the WEF-promoted vision of “Stakeholder Capitalism”, the WEF has created the “Global Parity Alliance”. The WEF, which defines itself as a key player in an emerging global government (in partnership with the United Nations), has structured this alliance of corporations to implement DEI initiatives across the globe rapidly.

The Global Parity Alliance, a cross-industry group of companies, is not just taking action, but accelerating it. Their urgency to promote diversity, equity and inclusion (DE&I) in the workplace and beyond is palpable, and their commitment to this cause is unwavering.

This group, the Global Parity Alliance, is not just a collection of companies. It’s a community of like-minded organizations, all striving for the same goal-better and faster DE&I outcomes. By sharing proven DE&I best practices and practical insights, they are inviting others to join them in this important work.

· To realize the promise of diversity, the Global Parity Alliance members and identified DE&I lighthouses will work to close opportunity gaps faster in the new economy.

According to Blackrock CEO Larry Fink, the WEF DEI initiative intends to (quite literally) force the implementation of social engineering/”stakeholder capitalism” DEI policies as the basis for corporate hiring and promotion rather than focusing on profitability, return on investment, and shareholder/owner value measured by financial outcome measures.

The problem with this globalist “can’t we all get along” Kumbaya naïveté is that the dogs of investment are not eating the dog food. And, of course, inquiring minds are raising questions after the serial DEI financial fiascos of Target and its line of transgender attire for infants, InBev with its transgender Bud Light advertising campaign, Disney with its corporate commitment to woke/grooming everything, farming icon John Deere’s surprise discovery that flyover state farmers were not buying into its DEI genuflecting to the WEF, and WEF partner CrowdStrike crashing the world wide web. To say that the financial genius of the WEF globalist leaders is looking a bit threadbare is a self-evident understatement. Oh yeah, and then there is the US Secret Service and the attempted Trump assassination. As covered in this recent Fox Business News segment, the natives are becoming restless, and drumbeats are being heard in the distance.

Now is an excellent time to remind all concerned that Larry Fink and Blackrock’s corporate financial ascendency is just another classic tale of DC/Democrat crony capitalism. Fink and company are not business masterminds. They are merely garden-variety Obama cronies parading around and masquerading as captains of industry. I admit to a growing sense of schadenfreude with the perverse logic inherent in all this. Perhaps merit-based selection of federal contractors actually results in better outcomes than just allowing politicians to develop public-private partnerships based on cronyism?

Please consider this AI-generated summary of BlackRock’s rise to global financial dominance, primarily based on “Times of India” reporting, for those who are not singing along with the bouncing ball.

During the 2008 financial crisis, BlackRock played a significant role in the Troubled Asset Relief Program (TARP) under the Obama administration. Here are key points:

  • TARP’s Legacy Securities Program: In 2009, the Obama administration’s Treasury Department partnered with BlackRock to manage the Legacy Securities Program, a component of TARP. The program aimed to remove toxic assets from banks’ balance sheets, stabilizing the financial system.
  • BlackRock’s Acquisition of Merrill Lynch’s Assets: In September 2008, BlackRock acquired a significant portion of Merrill Lynch’s troubled assets, including mortgage-backed securities, for $3 billion. This deal helped stabilize Merrill Lynch and prevented a systemic crisis.
  • BlackRock’s Management of TARP Assets: As part of the Legacy Securities Program, BlackRock managed a portfolio of troubled assets, including mortgage-backed securities and other complex financial instruments. This role allowed BlackRock to profit from the recovery of these assets, while also helping to stabilize the economic system.
  • Larry Fink’s Relationship with Obama: BlackRock’s CEO, Larry Fink, developed a close relationship with President Obama and his administration. Fink was a key advisor on financial matters, and BlackRock’s expertise was leveraged to inform policy decisions.
  • Thomas Donilon’s Connection: Thomas E. Donilon, former National Security Advisor to President Obama, is currently the Chairman of the BlackRock Investment Institute. During his tenure as National Security Advisor, Donilon worked closely with Fink and other financial leaders, including Secretary of the Treasury Timothy Geithner.

Key Takeaways

  1. BlackRock played a crucial role in the Obama administration’s TARP program, managing troubled assets and helping to stabilize the financial system.
  2. Larry Fink’s relationship with President Obama and his administration was significant. Fink served as a key advisor on financial matters.
  3. Thomas Donilon’s connection to BlackRock, as Chairman of the BlackRock Investment Institute, highlights the firm’s continued influence in Washington, D.C.

What the AI missed is that BlackRock was able to leverage its special relationship with the Obama administration and the TARP program to produce the most globally comprehensive database of business transactions that the world has ever known. And then to exclusively datamine this rich insider resource to generate forward-looking predictions, which it leveraged to yield a globally dominant investment portfolio. And now, BlackRock has captured the exclusive (US, of course) contract to manage the rebuilding of Ukraine. Once the US/NATO military-industrial complex has succeeded in depopulating and then occupying that region. See how that works? Thanks, O’Biden/Uniparty. Let’s watch to see how that plays out.

Getting back on track.

As exemplified by the overlapping fiascos of CrowdStrike and the US Secret Service, the whole problem with DEI-based hiring and promotion policies is that they result in a gradual, creeping degradation of organizational competence, which I have previously covered in my recent substack essay titled “The Great Enshittening.”

Here’s the thing: In the 21st century, we are the inheritors of an interlaced network of complex systems, each requiring considerable competence to maintain and almost all of which are currently strained to the breaking point. Electricity grids, air traffic control networks, server farms, food supply chains, global shipping, petroleum, finance, the internet—the list goes on and on. They are all interdependent and at risk of cascading failure. And into this mix, the self-proclaimed geniuses of global governance have injected themselves and their untested theoretical fantasies of “Stakeholder Capitalism.” Which unproven theory is just another way of saying Marxist social engineering lathered up with a thin veneer of Adam Smith to reduce the friction of forced introduction.

Returning now to that Silicon Valley earthquake that I mentioned in the opening.

A young entrepreneur-genius (named Alexandr Wang) has taken a stand, provided leadership, and is triggering a new movement—sort of a back-to-the-future moment. Hiring and promotion based on MEI: merit, excellence, and intelligence. What a novel concept! Many (including Elon Musk) are jumping on this bandwagon and endorsing this breakthrough concept <sarcasm mine>, which was just the way things were in my youth. Little things like acceptance into medical school. Hiring and promotion. Back in the day, it was understood that the business of business was producing quality goods, services, and value, and deriving wealth from honest productivity.

Mark my words, keep your eye on Alexandr Wang. He is going places.

To provide perspective and put in another plug for the Dean of anarcho-capitalism, Murray Rothbard, there are only two ways of accumulating wealth:

  1. Labor: Wealth can be accumulated through productive labor, where an individual creates value by providing goods and services to others. This approach is based on voluntary exchange, where individuals trade their labor for compensation, such as wages or profits.
  2. Theft: Wealth can also be accumulated through theft, where an individual takes wealth from others without their consent. This approach is based on coercion, where one party uses force or fraud to seize wealth from another.

Rather than quote derivative reporting from Fox Business News or even Callum Borchers of the Wall Street Journal, I prefer to let AI technology leader Alexandr Wang do the talking (originally on “X”, of course).

MERITOCRACY AT SCALE

In the wake of our fundraise, I’ve been getting a lot of questions about talent. All of our external success—powering breakthroughs in L4 autonomy, partnering with OpenAI on RLHF going back to GPT-2, supporting the DoD and every major AI lab, and the recent $1bn financing transaction—all of it is downstream from us hiring the best people for the job. Talent is our #1 input metric.

Because of this, I spend a lot of my time on recruiting. I either personally interview every hire or sign off on every candidate packet. It’s the thing I spend the plurality of my time on, easily. But everyone can and should contribute to this effort. There are almost a thousand of us now, and it takes a lot to hire quickly while maintaining, and continuing to raise, our bar for quality.

That’s why this is the time to codify a hiring principle that I consider crucial to our success: Scale is a meritocracy, and we must always remain one.

Hiring on merit will be a permanent policy at Scale.

It’s a big deal whenever we invite someone to join our mission, and those decisions have never been swayed by orthodoxy or virtue signaling or whatever the current thing is. I think of our guiding principle as MEI: merit, excellence, and intelligence.

That means we hire only the best person for the job, we seek out and demand excellence, and we unapologetically prefer people who are very smart.

We treat everyone as an individual. We do not unfairly stereotype, tokenize, or otherwise treat anyone as a member of a demographic group rather than as an individual.

We believe that people should be judged by the content of their character — and, as colleagues, be additionally judged by their talent, skills, and work ethic.

There is a mistaken belief that meritocracy somehow conflicts with diversity. I strongly disagree. No group has a monopoly on excellence. A hiring process based on merit will naturally yield a variety of backgrounds, perspectives, and ideas. Achieving this requires casting a wide net for talent and then objectively selecting the best, without bias in any direction. We will not pick winners and losers based on someone being the “right” or “wrong” race, gender, and so on. It should be needless to say, and yet it needs saying: doing so would be racist and sexist, not to mention illegal.

Upholding meritocracy is good for business and is the right thing to do. This approach not only results in the strongest possible team, but also ensures we’re treating our colleagues with fairness and respect.

As a result, everyone who joins Scale can be confident that they were chosen for their outstanding talent, not any other reasons. MEI has gotten us to where we are today. And it’s the same thing that’ll get us where we’re going, as we embark on our next chapter focusing on data abundance, frontier data, and reliable measurement to accelerate the development and adoption of AI models.

Alex

This statement quickly picked up an endorsement from someone who knows something about promoting excellence.

 

If you are committed to Making America Great Again, then be like Alex. Pursue MEI, not DEI, in all of your management practices.

For the sake of the broader community and mitigation of enshittification risk, if for no other reason.

https://www.malone.news/p/mei-merit-excellence-intelligence

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How Private Equity Causes More Harm Than Benefit to Economies

The Private Equity concept can be either a blessing or a curse.

It is terrific when used with win-win intentions that benefit the most people, and if genuine, successful expertise and management skills are applied by PE partners and senior managers.

It can also be disastrous for companies and cause significant harm to a nation’s economy, as outlined in this article.

https://keihatsu.substack.com/p/how-private-equity-causes-more-harm