With Eduardo Mufarej, Founder of Renova, 17 March 2022

What makes an effective politician? Politicians come from all walks of life but the vast majority of them do not have any formal training in political science or in government or in the tasks and tools of being a politician. Renova, an innovative non-partisan non-profit organization in Brazil, seeks to change that and to also improve governance, by training aspiring political candidates. In this podcast, Sami J. Karam speaks to founder and chairman Eduardo Mufarej about Renova’s mission, its training curriculum and its prospects.

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How to Tax a Billionaire (or Not)

Our institutions created centibillionaires and are now trying to contain them.

In Ayn Rand’s novel Atlas Shrugged, a group of high-achieving industrialists have had enough with being exploited (in their view) by “parasitic” collectivists and “second-handers”. They withdraw to a perfect community Galt’s Gulch aka Atlantis where they can live in peace and prosperity with each other, far away from the do-nothing (in their view) populace and according to their own laws and beliefs.

Because Rand mercifully never wrote a sequel (the original has more words than either War and Peace or Les Misérables), it is not clear whether these supermen and women lived happily ever after or whether, after enjoying the initial high of sticking it to humanity, their infinite egos led them to devour each other to oblivion and Galt’s Gulch disappeared Roanoke-like with no explanation left for posterity. That is, no explanation other than the obvious which is that a healthy society requires a fuller range of social strata and cultures, not only a super-stratum and a monoculture, in order to survive and to prosper.

No escape to Galt’s Gulch is currently offered to today’s billionaires who have so far opted to remain in the real world though they contend daily with insults and attacks from many quarters. It is necessary to say “so far” because some have been toying with otherworldly escapes, be they monetary via cryptocurrencies or interplanetary via emigration to planet Mars. Cryptos would free them from the gravity of central banks. And space from the gravity of Earth. After all, in our culture, “to leave it all behind” is nearly synonymous with high quality living. And to disrupt, to reject the dominant paradigm, are seen as ways to create new wealth.

Bernie vs. Billionaires

While still among us on earth however, even the ultra rich deserve… empathy. Or at least some recognition for their achievements. Their defining characteristic, shorn of all social and economic artifice, remains their humanity, not their wealth. Yet it is assumed by the angry-egalitarian political complex that it is fine to insult and harass a billionaire, as if their humanity was inversely proportional to their wealth. Starting with Bernie Sanders for example, some members of Congress have stated plainly that “billionaires should not exist”.

Because there are among the people mob inciters who amplify their message through social media, this slogan could be interpreted as incendiary, or as unsafely ambiguous. Does ‘billionaires should not exist’ mean that we should tax them until they are no longer billionaires? That would entail taking away 99% of some billionaires’ wealth. Or does it mean that we should limit their growth plans when their wealth hits the $999 million mark? Or force them to give away their wealth to charity? Or something else?

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Lebanon in Crisis, with Joe Issa El Khoury

“Historically, Lebanon prospered as a result of inflows of people and funds – people who came to take refuge in Lebanon and also funds. If we look at the post World War 2 period when modern Lebanon became independent and also at previous periods that Lebanon went through – and I mean over the past 100 or 200 years – one thing that was common to all these eras is its liberal economic system that was adopted by all who lived on this land. The constant was the liberal economic system.”____ Joe Issa El Khoury

Sami J. Karam speaks with Joe Issa El Khoury, a Beirut-based financier, about the tragic events that have unfolded in Lebanon since 2019. A sharp fall in the currency, a banking freeze, a political crisis, hyperinflation, and widespread street protests made 2019 a difficult year. But these events were then compounded by the Covid-19 pandemic and the explosion in the port of Beirut in 2020.

Issa El Khoury explains the sequence of events that led to the present, and offers a possible way forward.

Topics include:

  • 0:00 Introduction of Joe Issa El Khoury
  • 2:25 What is it like right now on the ground in Beirut?
  • 8:33 Why did Lebanon have a golden period in 1945-75; why was it later so prone to crisis?
  • 17:40 The Rafik Hariri era and the return of growth 1990-2005
  • 20:00 What explains the weakness of the Lebanese state: geography and demographics
  • 26:30 Lebanon’s diversity as a source of wealth; Example of Lebanese cuisine
  • 30:40 Crossing the line from a laissez-faire economy to a crony economy
  • 35:05 The real estate boom of 2007-11
  • 36:55 The impact of the Syrian civil war
  • 39:10 Crowding out the private sector
  • 44:10 The proximate factors that led to the meltdown
  • 46:15 The current condition of the banking sector; Role of the Central Bank
  • 51:00 Will depositors suffer a haircut? The Lazard and other plans
  • 54:45 Talk of privatization of state assets
  • 59:45 Political patronage in the public sector
  • 1:01:50 “All roads lead to Washington DC and the acronym IMF”
  • 1:05:20 Political reform and the role of the diaspora

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The Boom in Certainty

Sinclair Lewis called it “the sedate pomposity of the commercialist”. Now it has spread to many parts of society, not always in its sedate form.

Back in our final days as architecture students in Austin, our class had a farewell gathering with a professor who had been a valued mentor to several of us. As was habitual on such occasions, the professor was discussing with us the work of various architects when the subject of a newly-constructed building came up.

“I hate that building”, one classmate said flatly.

After an awkward silence, the professor mocked: “you mean, strongly dislike?” Off guard, the offending party protested that his use of the word was innocuous then and there. The professor conceded as much but explained that it was a visceral word, the kind of word that forestalls further discussion and that hardens the speaker’s and listener’s opinions. It is difficult to walk back or to change your mind from “hate”, and easier to do so from “dislike” or even from “strongly dislike”, he argued. His advice was to leave in one’s words an open path for retreat, in essence to never burn one’s rhetorical bridges.

This led to another discussion about certainty and about people who speak with certainty. The professor said that he had a reflexive dislike for certainty and that he felt a profound distrust towards people who speak with certainty. There is very little that is certain in life, he said, even among things of which we are convinced at a given point in time. Opinions change, science changes, research advances. New discoveries change our beliefs. Knowledge doesn’t just flow or evolve gradually like a river; it shifts laterally and sometimes suddenly like an earthquake.

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Florida in the Election

A French version of this article appears in L’Express.

Former mayor Mike Bloomberg has announced that he would spend as much as $100 million of his own money to help Vice-President Biden prevail in Florida on Election Day. This underscores once again the importance of Florida in this and every presidential contest.

Florida has a good track record of picking the winner in a presidential election. With the messy 2000 contest between George W. Bush and Al Gore, the state gained prominence as the ultimate prize and must-win battleground. To be sure, it is not a perfect track record, given that Florida favored George H. W. Bush in 1992 and Richard Nixon in 1960 over winners Bill Clinton and John Kennedy. If you go to earlier times, you also find that Floridians misfired with John Davis and James Cox in 1924 and 1920, two unknowns today except among aficionados of electoral history. But in sum, four misses out of 25 elections over a century can indeed be called a strong track record.

The stakes are high in 2020 given the state’s 29 Electoral College votes and the tightness of the race according to the polls. Vice President Biden is now nominally ahead by 1 to 3%, an insignificant gap that can easily close or widen in the remaining days of the campaign, depending on a slew of factors, not least the performance of each candidate in the upcoming debates.

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Camus Against the Virus

Decency is of little value without a foundation of honesty.

Albert Camus’ masterful novel La Peste (The Plague) is enjoying a resurgence in the current pandemic. Published in 1947 in the immediate aftermath of WW2, it was not, or not only, about a biological plague but also about the plague of Nazism or other ideological cancers and their equally devastating effect on humanity.

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Albert Camus

Among the many different citations recently lifted from the book, this particular one has appeared in several articles and countless social media posts:

“It may seem a ridiculous idea, but the only way to fight the plague is with decency.”

Coming from Camus, this sentence looked unusual because there is no direct literal word in French for decency as we mean it in English. The closest are décence and pudeur but these words convey different meanings.

In the original French text, Camus had written: Read more

A Few Certainties About Covid-19

There is plenty that we do not know about the coronavirus. But let us take stock of the things that we do know for sure, and of some other things that we will soon know.Screen Shot 2020-01-27 at 2.29.15 PM

Real-world Exponentiality

By now, a child understands exponential growth. If you start with one apple on March 1st and double every three days, you will have a thousand apples on March 31st and a million on April 30th.

But in the real world, not the abstract world of math, there are constraints on that growth. Doubling your apples every three days is feasible for a month or so because you can probably find a thousand apples and also find a place to store them. But it would be more difficult to find, transport and store a million apples, unless you are willing to pack a six car garage with apples from floor to ceiling (accurate math). If you did, most of them would rot and your neighbors would call for psychiatric help, two other constraints on unbridled exponentiality. Read more

The Pandemic as a ‘Gray Rhino’ Event, with Michele Wucker

“The paradox of the Gray Rhinos is that the further they are down the road, the less likely you are to do something about them. But that is the time when it will cost the least and you are most likely to be successful.” ____ Michele Wucker

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Sami J. Karam speaks to best-selling author Michele Wucker about her 2016 book The Gray Rhino and how its method and lessons apply to the coronavirus pandemic. Gray Rhino threats are highly probable, highly impactful but often neglected until it is too late or until the cost of dealing with them becomes very high.

Topics include:

  • 0:00 Introduction of Michele Wucker
  • 1:05 When will we be able to travel to Asia or Europe again?
  • 3:10 Explaining the concept and examples of Gray Rhino events
  • 9:00 Various reactions to the spread of the pandemic
  • 15:50 Was the virus predictable?
  • 19:20 Why should we have been readier for the virus when it is so rare?
  • 22:00 Why we ignore what is “over there”. Did it start “over there” or over here?
  • 25:35 How could we have prepared for the pandemic?
  • 31:00 The current catch-22: deaths by virus vs. deaths of despair
  • 44:10 Stages of a Gray Rhino event applied to the pandemic
  • 50:10 What other Gray Rhino events do you worry about? A triad of Gray Rhinos
  • 55:45 How alarmists help avert deep crises
  • 59:40 Conclusion

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(photo of Michele Wucker by Hal Shipman)

2020 Election: Democrats Heading to a Brokered Convention?

An occasional commentary on the 2020 US Presidential Election in which demographics and identity politics play a bigger role than ever before. Here, we explain why primary and convention rules make it difficult for a frontrunner to emerge in a crowded field.

Today, President’s Day, is as good as any to draw some lessons from the early contests in Iowa and New Hampshire.

Crowded Field

FIRST, the Democrats do not yet have a candidate with proven national appeal. Although Bernie Sanders and Pete Buttigieg ranked first and second in both states, they have yet to show that they can do well in states that are more ethnically diverse. Iowa is only 4% African-American and 6.2% Hispanic/Latino, and New Hampshire only 1.7% and 3.9% respectively. The United States overall is 13.4% African-American and 18.3% Hispanic/Latino.

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For Bernie and Pete therefore, the test of national appeal will come in South Carolina and on Super Tuesday when several states with large minority populations will hold their primaries.

Although Bernie came first in New Hampshire with 25.7% of the vote, that result was as much cause for concern as for celebration. In 2016, running against only Hillary Clinton, Bernie had won New Hampshire with 60.1% of the vote. Of course, the lesser draw this year is explained by a more crowded field. Nonetheless, it showed that 74.3% of New Hampshire Democrats preferred someone else over Bernie, so long as her name was not Hillary Clinton. Read more