On August 17, 2026, the Irreplaceable Spark 2 conference was held at the top-notch Westin at the Domain hotel in Austin Texas. But for me, the conference really began a day earlier on the campus of Dimensional Fund Advisors (DFA) situated in the gorgeous western hills of Austin. There, my brother Eric and I were greeted by Barbara, Reece and Marcos and given a tour of the headquarters.

For background, Dimensional is a uniquely principled asset management firm. It was founded in 1981 in a Brooklyn apartment - and was led by a remarkable group of academics and students who were connected through the business school at the University of Chicago. After visiting their world-class video production and podcast studios I was reintroduced to Paul, who had been my Dimensional representative ten years earlier when I worked at a regional bank wealth management and trust office.

Not only did Paul remember, but he presented me with a signed copy of Dimensional founder David Booth’s 2026 book titled Stay Calm - Learn to Embrace Uncertainty in Investing and Life. On that note, please look for my review of this book in the near future.

Remarkable but not surprising, Paul was also well informed in the subjects of the conference I was attending: reason, individualism, independence and free markets. Furthermore, I let his team know that Dimensional would be used as an example of those virtues applied to investing in my talk on Sunday morning. When we got to the hotel later that Friday afternoon, I was told that Booth had been a long-time devotee of our work.

And continuing that theme on Saturday morning was the speaker best suited to open the conference: hedge fund manager, registered advisor and FOX Business regular Jonathan Hoenig. The title of his talk was Principles of Popularity - the False Choice That’s Undermining Your Success.

Hoenig’s bottom line is that principles are not optional and popularity is the secondary benefit of rational ideas that are consistently applied. That is how we earn trust. And as Hoenig explained, not only are principles and popularity not opposed, but morality vs. reality is also a false dichotomy. As Hoenig stated,

“principles are the technology of achievement.”

Next, Hoenig said something worth repeating because it is good and true,

“markets do not care about popularity.”

Naturally, markets are uncertain and reward talent - and Booth also offers a good corollary in his book’s jacket:

“uncertainty isn’t something to fear - it’s where possibility lives.”

But how do we cut through the uncertainty and leverage the possibilities? That is what the Irreplaceable Spark conference is designed for.

In the world of personal finance, Hoenig recommended the behavioral management and risk control best practices that yielded success for him as a former futures trader and current investment advisor. And in the realm of psychology, Dr. Ellen Kenner recounted examples of self-knowledge and communication skills that produce emotional resilience, or as Hoenig had put it, “immunity to panic.“ Furthermore, by building on our experiences and partnerships with others, Kenner believes

“you will change what becomes possible.”

What followed was a panel discussion titled The Future of Money featuring three of the speakers: Hoenig, retired Air Force pilot and fixed income analyst Jim Brown, and me. Looking back, I would characterize the group as one panelist focused on the predictive power of technical analysis, one on the destructive power of central banking, and one on the decentralized power of price discovery.

That may be a simplistic description, but the variety produced some interesting discussion. And for you, I ask which of those three priorities is most consistent with reason, individualism and capitalism?

Yet, there was no conversation about the future of money, little about the present state of money, and nothing about the cause, nature and purpose of money. There was, however, disagreement about the cause, nature and purpose of the US Treasury bond market. To me, the important point is the previous 45 years of Treasury bond price action, what they reveal about the future - and that gets far too little attention.

Bringing coherence back to the speakers platform was the physical, artistic and emotional journey of fine artist Jon Wos. Born with Osteogenesis Imperfecta, aka brittle bone disease, it is impossible for the rest of us to comprehend the lifelong challenges of his debilitation, but Jon did something no one else could do. He illustrated the progression of the disease and its effects on his physical and emotional life through a series of original paintings. In turn, that brought amazing clarity to the Spark 2 audience.

So much so that I cannot do justice with these words, but it was a story of triumph that may have been impossible without the proper philosophical foundation that Jon discovered through the fiction and genius of Ayn Rand and his strength of character. And in tribute to both, Jon induced a standing ovation. Accordingly, I will continue my brief review of Irreplaceable Spark 2 conference in a subsequent article covering the next three speakers.

The rationalization for his opinions was, “this is the most dangerous thing that humans have ever gone near.” It is fair to say that I am not qualified to assess the opportunities or dangers of large language models with access to a global database of human knowledge and the perfect memory of hyper-scale data centers, but I do believe that Gates’ economic and political reasoning is terribly flawed.

Evidence for his economic thinking began with: “Medical claims, which is a very AI capable task, then Pettigrew, who has very few human employees will come in and change the pricing model for that industry.” (29:45)

Pettigrew is a medical billing services company in South Carolina that manages accounts receivable and customer service centers for hospitals, insurance companies and physician practices. Gates’ complaint is that an efficiently managed company has the ability to lower costs and prices will force people out of jobs. Heavens!

Demand Elasticity

Bear in mind, this is what myopic bureaucrats, countless pundits, economic development agencies and nearly every President and Congressman do - starting with their own jobs. In effect, Gates and company are pandering to the “protect American jobs” crowd - without regard to the nature of employment, innovation, competition, and efficiency that creates all of the wealth that creates all jobs in the first place.

That is a big deal, but nearly no one you talk to understands this basic economic principle: money is production, money follows production - and money goes nowhere else.

At the same time, it is easy to get lost in the economic jargon that pundits and politicians like to use to sound smart. And Klein’s interview with Gates is a good example: “The two counter arguments I’ve heard people make on this, one is that you have a Jevon’s Paradox effect where the cheaper and more widespread availability of this kind of intelligence leads to a massive increase in the demand.” (29:55) The old Jevons Paradox, eh?

William Stanley Jevons was a 19th century English economist and the concept states that when a valuable resource is used more efficiently, the overall demand for that resource will increase. The paradox is that if you need less of it, such as the gasoline your car demands with a more efficient engine, you will use less gasoline. But in the aggregate of a nation’s economy, the demand for and the consumption of gasoline will increase because efficiency reduces costs and prices if prices are elastic.

Gates picks up on this concept of economic price elasticity, but he does it as the demand corollary: “Jevons is just referring to the fact that parts of the economy are subject to demand elasticity.” (31:00).

If these terms are familiar to you, it’s natural to think “what’s the big deal?” But here, Gates reveals himself. His big complaint is that there are sectors of the economy that have inelastic demand. His premise is that repetitive industrial labor is good for a society that is advancing beyond the industrial revolution of the 19th and 20th centuries.

Besides medical billing, another example Gates used was tire manufacturers. The demand for automobile tires will not increase if tire durability is increased by AI assisted production methods. Another was that retail orders on Amazon will not increase if Amazon distribution centers become more efficient with robotics. That is demand inelasticity and those companies and their investors must be made to pay, by golly.

Or in Gates words,

As soon as you complete the entire task, it doesn’t matter that there is demand elasticity. That goes into the token budget. It doesn’t go into the human salary budget . . . Once you cross the reliability threshold, both white collar and humanized robots, you’ve destroyed jobs and you leave no high ground. (31:00).

The implication is that government enforcers own the high ground whose foundation is the frozen intelligence of machinery.

No doubt, AI agents seem like uncharted territory, but so did the spinning jenny when the world was lit only by fire. In fact, there were countless new career opportunities supporting the jenny: factory operatives, millwrights, machine builders, bleachers and dyers, cotton merchants, dock workers, shippers, and clerks. And imagine the countless new careers spawned by the invention of the steam engine - and then industrial robotics.

The exact numbers of new jobs is impossible to define - as the division of labor becomes more specialized, the complexity of supply networks grows exponentially.

The important economics lesson lost on Gates and nearly everyone you talk to, including every economist who shills for “public policy” remedies, is that efficiency lowers prices that frees money to spend on other goods and services or gets saved and invested for the production of future goods and services that will be the catalyst for these new jobs.

Its Different This Time

If Jevons has his own paradox, I guess Bill Gates wants one of his own. The man at the forefront of guiding electrons across silicon wafers does not believe you are able to guide your destiny across newly manufactured discovery time.

Innovation in the past . . . you’ll employ a lot of people there. You don’t have that in the broad economy. People who say there will be net additional jobs, I don’t understand what they’re thinking. They must not understand the pace of improvement we’re on. (32:40)

In other words, it’s different this time. Machines doing heavy and repetitive labor was good when there was demand elasticity, but with AI? To Gates? Not so much. Most people are unable to realize new opportunities and maximize their creative talents. It seems too few of us have the will to develop our productive and creative talents, so the State must protect us from those who do.

Here, Klein feeds him more rope with the second counterargument referenced above:

The other, which is an argument from Alex Imas . . . that you will have this sort of an explosion in the relational sector, that one thing that happens that when people get wealthier . . . is that they all of a sudden get a lot more human help, right? (33:10).

Klein is making a critically important point: what happens “when people get wealthier.” They buy more stuff, or they save and invest more, or they buy more stuff and invest more. That accelerates wealth creation and specialization - and if Gates doesn’t understand what they’re thinking, that’s his business. I am going to learn what Alex Imas is thinking - and let you know at a later date what I discover.

In the meantime, the consequence of Klein’s comment was put into concrete terms by finance journalist John Tamny in his favorite book of his own authorship titled, The End of Work - Why Your Passion Can Become Your Job:

Without technological progress, your odds of finding work that matches your unique skills and intelligence would be greatly reduced . . . It’s clear that workers go to where inequality is steepest because that’s where the opportunity is.

This is what Gates is deciding for you: the likelihood of you having a passion and turning it into your livelihood: “Believe me, the labor intensity of wealth is down super dramatically . . . Name a blue collar profession that is subject to Jevon’s Paradox, or do you not care about blue collar?” (33:40)

Does Gates really believe that everyone employed in a “blue collar profession” is maximizing their unique skills and intelligence?

The Ultimate Resource

No, but in this exchange with Klein about 20th century manufacturing jobs becoming automated, moving to less developed societies that are better suited, and America becoming a more of a service economy, Gates replied:

Yeah, human cognition became the scarce element. It’s always about scarce elements. Once you replace human cognition as a scarce element, in fact, you blow it away in terms of working 24 hours a day, reading more, knowing every language, there is no scarcity that you’re moving up to. (34:35)

It seems Gates is fearful of the new realms of specialization that he did not invent himself. In my October 5, 2025 review of Tamny’s book, I summarize a few of his observations this way:

Of course, the above is a tiny, representative sample of the specialties for which people have a passion that became career choices. And I am no more qualified than anyone else to define the next decade of new specialties that will become reality. But I can say with certainty there will be countless new opportunities because of that which Gates complained about: knowledge retrieved in any language 24 hours per day. It’s a beautiful thing - especially if you have rational principles.

Apparently, Gates believes that Amazon warehouse jobs that didn’t exist twenty years ago need to be frozen in place for the next twenty years because of demand inelasticity. Selfish consumers are the cause, the money they spend and invest on other goods and services is not relevant, and the State must do what they like to do most - manipulate aggregate demand.

In the meantime, you can refer to Chapter Eight of The Moneyball Method titled Be Your Own Hero, study the Site Map on page 182 - and ask yourself the same questions I asked the audience on Sunday October 18, 2026 at the Irreplaceable Spark Conference in Austin, Texas:

In other words, it IS different this time, but only if you apply the entrepreneurial mindset to your financial life of saving, spending and investing: create the vision, take calculated risks, learn from experience, and measure success. Or as I challenged the audience in the conclusion to my talk:

Look out for Part III of my review of the Klein-Gates interview in the next several days.

Last week I began with the Moneyball Method’s premise: firstly, earned profit is a virtuous goal, because it combines other virtues like productivity, justice, and honesty. The second premise is Objective Data. The third is to declare independence from common wisdom. Let us now apply these principles to the three fields in modern medicine not forcefully governed by altruistic government goals and see where they lead us.

For further information, please read my book The Moneyball Method: A Middle-Class Manifesto for Objective Investing, now out on Kindle.

Applying the Moneyball Method to goods and services outside baseball and secondary market securities like stocks and bonds is a noble venture. But it does not transfer to everything and to some things not at all. On the plus side, statistical analysis is essential for casinos, prediction markets and other games of chance – and it has also proven its value in biology, engineering and chess.

For example, the two services I described in a previous essay, childcare for infants and toddlers plus state-mandated childhood education, are not compatible with Moneyball. But because they are highly localized and personal services that are heavily taxed and regulated, I made the comparison anyway. Childcare and education deserve better than the emotional rants of the collectivist and altruistic voices of the State who dominate academia and media.

Compounding the problem, “working families” and “improving lives” are the sacred trust that both major parties have assumed for themselves. But none of that is sacred or the duty of a legitimate government. Those catchphrases are ambiguous, meaningless terms that sound good only to a culture trained in the morality of good intentions.

But this is election season in America, and the wizards of wastage have driven their “affordability crisis” bandwagon through primary elections on their road to serfdom – for you. Accordingly, I will use this space to describe the application of The Moneyball Method to two more sets of goods and services in high demand. And to be consistent, I will apply the same premise as before:

For goods and services that do not lend themselves to quantitative analysis, the first step is to find ways to reject the established bureaucracy. Second is to acquire competitive intelligence, find cheap and reliable talent, and save money. And third is to take back ownership of our lives from the “well-intentioned” bureaucrats lining their own pockets.

Home Ownership

In the case of purchasing a home, it not only lends itself to quantitative analysis, but there was an active business model that rejected the established bureaucracy, offered competitive intelligence, and provided access to cheap and reliable talent. The company was REX (Real Estate Exchange), and it was founded by Jack Ryan in 2015. REX charged sellers about 2.5% - and to keep costs down, it used predictive analytics and digital technology that rendered the established bureaucracy obsolete.

Sound familiar? For perspective, the standard 6% commission on the purchase/sale of a $300,000 home totals $18,000 - and is roughly equivalent to one year of child care at a licensed day care facility or an entry-level full-time job paying $9 per hour. Naturally, a $600,000 residential transaction will cost the buyer/seller $36,000.

For the sake of argument, that fee may have been reasonable when it was first established in 1939, but there have been a few technological advancements since then. More specifically, finance journalist John Tamny reported this in his 2024 book, Bringing Adam Smith into the American Home:

Real estate brokers were essentially the last expensive intermediaries standing. The widespread adoption of internet technology dramatically lowered the buying and selling costs of nearly every asset in the US – except for homes. The stock and bond markets are possibly the most obvious form of the movement toward direct-to-consumer platforms . . . empowering the consumer with information at low costs.

Bypassing the agent/broker, REX did not list their properties on the National Association of Realtors Multiple Listing Service (MLS) database. Instead, its listings appeared on the Zillow, Trulia, Google, Facebook, and Instagram platforms. As Jack Ryan tells it:

Lynley Sides and I founded REX . . . to bring the shareholder revolution and consumer-first orientation to the largest industry in the U. S., which had successfully and supernaturally kept competition out for decades.”

That deserves some explanation. The shareholder revolution to which Ryan refers is the value released from the dormant assets of inefficient companies serving their entrenched bureaucracies. By the 1970s, publicly traded companies were managed by corporate bureaucracies that owned little stock and controlled the board members who were more friendly to senior management than investors.

Frequently, these conglomerates were not innovative, had become stagnant, and their underlying asset values attracted the attention of corporate raiders who acquired enough stock to obtain a controlling interest. It was such a healthy development that was demonized by Hollywood with the 1987 hit movie titled Wall Street starring Michael Douglas and Charlie Sheen.

Specifically, it featured leveraged buyouts during the 1980s and 90s for the long-term benefit of stockholders and customers. Yes, the interests of investors and customers are aligned – despite what we hear from the nattering nabobs in politics and media.

Regarding REX, it ran afoul of one of the top two lobbying groups in America. The National Association of Realtors (NAR) and the US Chamber of Commerce have traded spots for years - and with the acquisition of Zillow and its integration into the MLS system in 2021, REX was relegated to nearly invisible status and forced out of business.

Medical Tourism

Not surprisingly, and as reported by InvestmentBank, the buyout of medical doctors’ practices in America by Physician Practice Management Companies (PPMC) was also a phenomenon during the same period:

During the 1990s, competition to consolidate physician practices reached a feverish pitch with the emergence of Health Maintenance Organizations (HMOs), and the resulting joint ventures formed to integrate and operate acquisitions while adhering to federal and state regulations.

But compliance with federal and state regulations is not aligned with the interests of shareholders and customers – and the PPMC business model eventually collapsed. Inevitably, the next wave of physician practice buyouts coincided with the Affordable Care Act (ACA) scam:

Several factors are attributed to the most recent surge in physician practice acquisitions by hospitals. In 2009, healthcare costs consumed 17.3% of GDP or $2.5 trillion according to the Center for Medicare and Medicaid Services (CMS), and since then healthcare spending has increased to $3.5 trillion, accounting for 17.9% of GDP.

Clearly, this trend is the opposite of The Moneyball Method, but there is another promising trend in favor of cheap talent trained at the best medical schools in America. These are professionals who deliver high-quality medical procedures and treatment at a fraction of the cost of state-sponsored “affordable” care.

Also known as “medical tourism,” patients must travel to another country to gain access to the substantial cost savings. And because medical procedures may involve many days or weeks, there are opportunities to experience other cities, cultures, and climates. One such business is MedEscape (not Medscape) that caters to customers from the United States and Canada.

Accordingly, they have vetted and partnered with professionals in Mexico City, Costa Rica, and Panama. But make no mistake, I have no experience with MedEscape or any other medical tourism agent. This reference is not any kind of recommendation or endorsement.

The Moneyball Method

What it does is illustrate an expanding new business model for objective data on high-quality providers at highly discounted prices that avoid the entrenched bureaucracy promoting collectivized, single-payer systems.

And with the assistance of your favorite AI agent, you should be able to search for any procedure that interests you and discover where in the world the greatest values are to be found. The same was true for traditional home buying when REX was able to compete on the power of prices and information instead of the power of political pull.

However, the REX reduction in the cost of buying a home by 3.5% may have been a significant cost savings, but the price of real estate must be understood in the context of existing assets. Hard assets like homes and precious metals are not wealth-producing. Their dollar price appreciation is largely due to the devaluation of the dollar, and their historic increase in dollar price is the market giving us valuable information: economic intrusion by the force of government is destructive, and value is most likely to be discovered where State regulation is least.

That includes direct exchange with government agencies and with private companies that are subsidized by or that endorse government agencies. Ultimately, the only closed economy is the global economy; dental, cosmetic, and surgical needs may be better treated in locations outside the United States, and owning a home may restrict your ability to seize opportunities out of state. That is The Moneyball Method.

Fortunate people find themselves in circumstances that are remarkably good. Productive people create remarkable occasions that exhilarate themselves and the fortunate ones. But to experience the creative energy of two productive people who dedicated themselves to an exhilarating celebration of life is beyond remarkable.

In my case, the context of the celebration was the traditional American marriage of two remarkable people of independent and principled character. More about them later. What occurred to me early as events unfolded was the concept of “intentionality.” According to the dictionary of the American Psychological Association, intentionality is:

A characteristic of an individual’s acts that requires the individual (a) to have goals, desires, and standards; (b) to select behaviors that are in the service of attaining the goal; and (c) to call into conscious awareness a desired future state.

The preliminary events, marriage ceremony, and parties had intentionality written all over them: an exhilarating experience for everyone and in every way. And like any worthy project, a major part of the fun is the planning, the challenges and the anticipation. But I can’t speak to that. I had very little to do with any of it. But it’s there. I know it. It had to be.

The location for the wedding and reception is a concrete example in brick and mortar. It was a finely renovated warehouse in a warehouse district with one world-class feature: the only suitable facility in the world with the Statue of Liberty looking directly our way to bless the gathering.

But the significance of intentionality began with the groom’s father telling stories about his son’s development into a young man during the rehearsal dinner. Frequently emotional, the justly proud Dad talked about Mike’s determination, his singular focus on goals he chose for himself, and his independence in choosing the values he wanted to pursue. Not surprisingly, he was also a hockey player.

Not only did Mike’s integrity include his relationships with siblings, cousins, high school friends, college buddies, and professional colleagues, but it was nearly identical to the character traits of his bride, Alyson. As her father, I know how well liked and respected she is among her cousins, college friends, and professional colleagues. And I am one of those fortunate people who found themselves in circumstances that are remarkably good. She also excelled at everything to which she put her mind.

When selected by her university’s college of business to represent the senior class in the alumni magazine, Alyson described her method to the journalist as “full immersion.” When asked what she was most proud of, she replied, “riding my bicycle across Iowa with my dad.” All of this — family, friends, sports, career, and not committing to marriage until that other independent, benevolent soul reveals themselves — speaks loudly to the intentionality of both of them.

So, there was this wedding along New York Harbor with two fine individuals who knew how to have fun with their closest friends, family, and colleagues. But there’s more. It was October — the ideal time of year for that location, and they knew it. And a perfectly comfortable day it was. As the sun began to set over New York Harbor, over 200 guests waited excitedly for the outdoor ceremony - and the groom, best man, and officiant were in position.

But with a fairly stiff breeze near the water and the wedding party having marched down the aisle, Alyson had the presence of mind to call an audible. Her attendant tested the wind direction with the bridal veil to make sure it wouldn’t blow around in her face during the wedding vows. Perfection — it would blow the veil behind her.

Then I asked, is this the traditional wedding march or Free Bird? “Neither, Daddy, it’s a bluegrass cover of a techno song.” Intentionality. Who has a bluegrass band at a traditional New York wedding ceremony playing techno and pop music? A girl born in Kentucky who played grade school chess, won the lead for her Ohio high school play, and is now a managing director at a New York investment bank.

Speaking of money and finance — I had to work that in, right? The wedding officiant (who was also an equity analyst) related many stories of the bride and groom’s courtship, including the phone call that was their introduction. It seems Mike had written a report that misused the phrase “adding alpha.” They both worked for the same firm; he had a marketing role, she had product development responsibilities, and she called him on it.

For the laymen among us, “alpha” is a big deal in the asset management business; maybe the biggest. It means excess rate of return over a specific benchmark, and it must be used accurately. Needless to say, the issue was resolved, the relationship germinated — and it blossomed according to the Golden Ratio of the Fibonacci sequence.

The evening after the wedding, a guest and amateur investor tried to lecture me about the merits of his personal excess rate of return strategy. For an asset management firm, rate of return is essential because they have thousands of unique investors that no fund manager can know, but individual investors must define their values and goals to be successful.

I bring this up because there was no intentionality to this investor’s habits. He had the typical rate-of-return mentality without regard to his cash flow expectations. He thought he had mastered something but was not able to describe the purpose for his financial assets. There were no defined values or goals. He admitted “that is hard,” and that it is easy to buy large American growth stocks in a raging bull market, but he had no interest in a proven way to define success and measure performance objectively

To me, that is no different than the Paul DePodesta character in the Moneyball movie who said that same thing about the baseball industry. Team managers and talent scouts had not properly defined their goals for hiring baseball talent. It should be scoring runs, but instead, they hired multimillion-dollar players that do not produce runs in sufficient quantities. In turn, that does not create the remarkable occasions that exhilarate baseball fans and justify the financial risk.

Put together, traditional scouting departments and individual investors do not understand risk as a capital asset to be invested efficiently. They are unaware of spending capacity and risk capacity. In baseball, DePodesta’s goal was to improve the culture, change the philosophy, and buy run production instead of buying players. The same is true for objective investors. We do not buy stocks, and we do not buy funds. We buy the runs scored of defined goals for a lifetime of confidence.

Back to the newlyweds, they are proof that natural law is certain, human perfection is possible and they partied like it was 1999. Naturally, the epic location, amazing sunset, twilight music, cocktail and dinner hour hospitality, electric DJ and dancing, battalion of photographers and staff, and renewed acquaintances and new friendships will be remembered by the wedding guests for a lifetime. In fact, the common description was “stunning.”

In a larger sense, the event merely symbolized the bride and groom’s desires and standards, goal-directed action, and awareness of their future state. And because of Mike and Alyson’s reverence for their own lives before becoming each other’s highest value, we became the fortunate ones. That is how truly civilized cultures operate. That should inspire all of us.

Ed: The Moneyball Method Team would like to congratulate Mark Shupe, his daughter and son-in-law — Alyson and Mike — and everyone who loves them, on this wonderful occasion.

Abundance is affordability, and affordability is abundance. The enemy of both of these is the devaluation of money. All government spending on education, housing, childcare, healthcare — makes those very things unaffordable. Listen to the podcast for more!

For further information, please read my book The Moneyball Method: A Middle-Class Manifesto for Objective Investing, now out on Kindle.

The Ezra Klein Show released a podcast interview with Microsoft founder Bill Gates on September 30, 2026 and the subject was Artificial Intelligence (AI). More specifically, Gates was there to discuss AI’s grave and imminent dangers to humanity.

Before listening to the Q&A, this interview was interesting to me because Klein is coauthor of the bestselling book titled Abundance: How We Build a Better Future. Not only does the book endorse massive new government expenditures on electrical infrastructure for data centers and robotics, but Gates is a software pioneer turned philanthropist who is close to the action.

Second, this interview promised to be interesting for competitive intelligence about today’s mystical devotion to the virtues of the State. In that regard, Gates did not disappoint. And lastly, I need to further educate myself about the nature, capabilities, and amazing possibilities of AI. Of course, those are only limited by our imaginations, and lifelong learning is just that.

Because this interview is almost 75 minutes long and the first 30 minutes is loaded with compelling statements from Gates and one from Jensen Huang, CEO and President of NVIDIA, I will focus this essay on the opening comments. To clarify, this article falls into the category of government versus private enterprise – and the second essay will be dedicated to Gates’ version of economic principles applied to AI development.

The Power of AI

The premise for this interview is an August 26th article published by Gates on his blog, gatesnotes.com titled:

What jumps out at me is the liberal use of the word “We” by Klein and Gates in the subtitles of their printed works mentioned above.

With a high level of confidence, it can be assumed that “We” is always and everywhere the virtuous and omniscient State – as if “We” the People is a good precedent. It is not. The Preamble to the US Constitution is in the context of explicit restrictions on the power of government – not the surrender of individual rights and political liberty.

Regarding the progress of AI agents, Gates informs:

“That’s a moment where I go, this is incredible. The capability of doing long running complex tasks has now gotten to the point that they are superhuman at writing code and in finding flaws in code.” (06:00)

As I learned later in the interview, finding flaws in existing code is an important element to Gates’ grave concerns - because when that is achieved, bad actors can disable corporate entities, government agencies, and economies.

Of course, the bad actors are people hell bent on the acquisition of unearned power and wealth, but Gate’s tends to focus on the AI tool itself and with this premise:

“When you move the template away from biology to silicon, you don’t have these values between individuals, you don’t have a limited memory.” (8:20).

Yes, limited knowledge, personal relationships and moral principles, if any, are attributes of being human.

And AI is incredibly fast at aggregating and synthesizing knowledge, but no one can control the actions of a bad actor manipulating electrons and silicon for destructive purposes.

As you know, AI tools have potential that we are only beginning to see:

“The idea of reading medical journals to see if there is anything that we didn’t spot. AIs do that today. That’s why particularly, for less common diseases, they are so super human at seeing a set of symptoms and being able to diagnose them.” (8:50).

In fact, AI is not only an amazing tool for medical professionals, but I suspect it is of great benefit to untrained people who engage with it in the proper context.

Unfortunately, Gates interprets our collective relationship with AI as similar to veterinarians and their patients:

“If you don’t maintain control over it, you evolve a species that will beat us, as to where we are, to say, dogs, cats, just in a very different realm.” (9:20)

Does Gates imply that AI agents will have free will but the rest of us — including murderous villains, are predetermined robots? Yes.

The Power of Government

Naturally, there was some balance presented for the life enhancing benefits of AI, but when that balance is not grounded in rational principles, there will be contradictions.

Early in the conversation, Gates offers this:

“We’ve gone from it being a joke to it will be a peer. Perhaps not making any final decisions, but it will be a peer in deep, complex discussions making a significant contribution.” (7:20)

Yet two minutes later he promotes AI as a useful tool, but only for one omnipotent overlord:

“They all say, whatever goes on here, can’t just be driven by profit maximization. We have to have a charter that to gain thresholds we have to exercise judgment that will be against profit maximization. Those mechanisms only work if there is only one company.” (9:40)

On the subject of limited knowledge, personal relationships and moral principles, Gates declares:

“No one involved with this takes lightly the idea that OK, what world does super powerful AI create?” (10:20)

So Klein follows up with:

“I spoke last week with Jensen Huang of NVIDIA, and he said that his perspective is that safety is a real concern, but the race dynamic is fake. If the product isn’t safe, don’t release it.”

Specifically, this was Huang’s response:

“If I believe that we are about to launch a product that is unsafe, it is completely in my ability, my power and my responsibility – and I’m incentivized to do so, to not launch the product.” (10:55)

Huang seems to be the reasoned voice who endorses the trader principle and political liberty of capitalism, but Gates pushes back:

“There’s never been a product that is less understood, as to what its capabilities are, than AI. And AI has crossed the threshold in its ability to empower bioterrorists to kill hundreds of millions – that exists today. The ability to do a cyber-attack that scrambles all the bank accounts, shuts down the electric grid – that exists today. (11:30)

Notice that Gates has reversed cause and effect – AI is the bad actor, but tempers that with:

“It used to be that only nation states had enough resources and capability to do these things. Now that power has been passed into the hands of a small group.” (14:35)

Significantly, Gates never suggests that “a small group” of religious zealots who worship death must be identified and eliminated; or that their ideologies hell bent on the acquisition of unearned power be crushed. Heavens, that would be the morally responsible path.

Instead, he proposes his own mystical and collectivist ideology:

“We are not awake to where we are with the AI in choices that humanity, not a country, but all of humanity has to make for doing this, to shape this in a net positive direction.” (12:45)

Expanding on that theme:

“The control problem is a serious problem, but the imminent risk is not RSI (recursive self-improvement). The imminent risk is, these are the most powerful tools ever. And unlike every other dangerous technology, they were not funded by government R&D – and the government is not a significant purchaser of these products.” (19:40)

If only the State had control in the first place, the State is “humanity” after all!

However, the recursive self-improvement reference is important. Gates is not explicitly stating that RSI is consciousness or will lead to consciousness, but he is expressing his fear that human beings with free will in the private sector are more dangerous than their counterparts in government.

The Impotence of Unreason

Now we are getting somewhere – the stars of Klein’s Abundance and the stars of Gates’ control problem are in alignment. But so far Klein has done a notable job of bringing up the rational alternative:

“Why is anything needed beyond, and is anything needed beyond, the simply natural incentives under capitalism and normal corporate reputational management?

To that, Gates willingly exposes himself:

“I can’t believe you’re asking that! This is the most dangerous thing that humans have ever gone near.” (15:25)

To Gates, the natural incentives of the builders in free markets are inferior to the forced incentives of the builders of prisons in government.

Doubling down his supernaturally virtuous and omniscient State:

“There is no supervisory layer today. That supervisory layer is needed urgently to prevent bad people from using today’s AIs to shut down economies or kill millions of people.” (20:35)

Never does Gates mention the hundreds of millions killed by humanitarians for the greater good in China, Russia, Germany and Japan in the 20th century. Never does he mention the greatest 21st century threat to civilization and most likely to use AI for genocidal purposes: Islam.

Instead, Gates is more interested in blaming the victim:

“It’s there for people with mal intent to go and use it. So, you would think we’d move up from that nationalistic view to kind of a humanity level view about how we engage in these protections.” (26:10)

As a consolation, Gates offers his “humanity level” compromise:

“You can still be free, you can still be customized, but you have to stay on a platform where the sovereign can make sure you have not removed the monitoring and safeguards.”

You have to. Or else. And keep up the good work.

Certainly, everyone attached to “the sovereign” is rational, right? And government work attracts those types, don’t you know? In the next article I will discuss some of the economic principles that Bill Gates’ used to justify the insidious political power of prior restraint.

It starts with a system of reliable money that promotes savings and investment. Division of labour, free flow of capital — these are all continuations of the same goal and same concept in different functions and flows.

Another update: I attended a conference recently called “The Housing Affordability Crisis” which made me feel this topic was most important — more than usual at the very least.

The inspiration for this series is the Ordinary Abundance website — and I would urge you to check it out for yourself and marvel at the extraordinary ordinary abundance of modern life.

For further information, please read my book The Moneyball Method: A Middle-Class Manifesto for Objective Investing, now out on Kindle.

It is natural and healthy to pay a lower price for goods and services - especially when quality and time preference are not impaired. Not only does a lower price allow for other spending and savings that can improve your life, but it is also possible to improve those features at a lower price. With that, there is also the emotional payoff for earning a greater value.

Broadly speaking, that is The Moneyball Method. Not only is objective investing about the achievement of your important goals, but the method also does this at lower price points and with greater efficiency. For my purposes here, efficiency is a goal achieved with minimal costs of time, money, risk, and complexity.

So, how does Moneyball apply to myriad other goods and services that affect my life? In major league baseball, it began with the profit motive. A small market team with a low budget for baseball talent needed to sell tickets to generate revenue by winning games. And to earn a profit, teams on a low payroll diet need cheap baseball talent.

In other words, a quality product to meet high consumer time preferences at a low cost. And to achieve that, the early adopters had to reject the traditional bureaucracy of scouting departments and baseball media. Why? Because those institutions were dependent on the common wisdom of baseball jargon and unreliable statistics.

But more importantly, they needed a reliable method for finding cheap talent, winning games, and selling tickets for the lowest cost per win.

Affordability

Then there is the so-called affordability crisis. Can Moneyball be applied to other goods and services like housing, education, pharmaceuticals and childcare? What about groceries, energy, medical services and transportation? And what business models are useful prototypes for the efficient delivery of those needs and desires?

Regarding the first group - housing, medical, and childcare are so heavily regulated that finding high-quality talent at significantly lower prices is far more difficult. That’s where the black market comes in - as it must. The second group is also heavily subsidized - some more than others- which also makes it challenging to find great values, but nothing is impossible.

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However, baseball and capital markets have something in common that is critical - a large database of statistics that reveal probabilities. But for goods and services that do not lend themselves to quantitative analysis, the first step is to find ways to reject the established bureaucracy. Second is to acquire competitive intelligence, find cheap and reliable talent, and save money. And third is to take back ownership of our lives from the “well-intentioned” bureaucrats lining their own pockets.

Child Care

A good place to start is the service that is least friendly to mass market evaluation; the one that is most local and most personal - child care. And to reject its established bureaucracy in America is to avoid licensed daycare businesses and reject government facilities.

While the majority of private providers may have well-trained and responsible caregivers that do a fine job, they are forced to comply with regulations that price them higher than many people can afford. Today, their average national cost is almost $350 per week. That works out to about $18,000 per year - and your child will get their one-size-fits-all level of attention.

Regarding competitive intelligence, today’s top alternatives are nanny shares, parent-shares, and in-home unlicensed providers. However, nanny-share may be more expensive but much higher quality; in-home providers may be the same price point as licensed facilities with wide-ranging quality experiences, and parent co-ops may be the best possible - if possible. And because of the success of technology-assisted remote work, flexibility with one or more of these solutions may be the best option for many working parents.

But do they avoid the claws of the State regulators or its tax collectors? In most cases, emphatically, no. Nanny-share arrangements are subject to the complexity of income tax withholding, payroll tax returns and remittances, and Form W-2 reporting. Lastly, parent co-ops may be best for ease of compliance, but if there are any financial exchanges, state licensing regulations can be triggered.

Certainly, quality caregivers deserve quality compensation, and child care is not a right, but with the magic of technology, online networks are available to help parents find the best possible price and service. In summary, local parent and nanny websites, social media parenting groups, care.com, and the subscription service nannylane.com may be the closest thing to the reliable, objective data that defines The Moneyball Method.

Education

On the other end of the spectrum is a service we associate with child care, but is widely dispersed and universally available to people of majority age. Knowledge and understanding also appreciate in value with continued use, but there are two conditions - your effort and your judgment. And with gratitude to Renaissance intellects, manufacturers, bankers, and artists, easy and free access to knowledge was not the case before the mass distribution of books.

At the same time, and as human nature dictates, young children do not have the liberty and judgment to free themselves from government-monopoly public schools. In addition, those school systems likely trained their parents. As a result, rational judgment remains elusive for generations of Americans. Supernatural faith may have lost much of its influence since the Renaissance, but the cognitive real estate has been ceded to faith in the State.

Setting aside irrational beliefs, it requires little effort and money for adults to reject the established bureaucracy, find reliable educational services, and learn for free or at discounted prices at alternative schools. In fact, the world’s library of literature, science, mathematics, economics, history, and philosophy is at nearly everyone’s fingertips - starting with The Moneyball Method!

But for parents of young children with the desire and determination to rid their families of the power and influence of teachers’ unions, state-funded teachers’ colleges, and the state education departments, there are some great alternatives:

The best physical schools, but in limited supply because they are funded by the State and tuition-free, are the Classical and STEM (science, technology, engineering, math) charter schools. A closer alternative to values-driven investing is self-directed homeschools that bootstrap Classical, STEM, and other free curriculum from producers such as amblesideonline.org and Hillsdale 1776.

The Moneyball Method

This is where Moneyball Method’s lowest cost per win concept may be viable. Although the cognitive development and character of your children are difficult to quantify, it is possible to calculate a high confidence level with the least risk. Naturally, that begins with the objectivity of your goals combined with objective market data.

For market data on registered securities, I begin with the Center for Research in Securities Prices (CRSP) affiliated with the University of Chicago. For large-scale research on charter school performance, a reliable source is the Center for Research on Education Outcomes (CREDO) affiliated with Stanford University.

Of course, capital markets have a century of price data; charter school information is limited, and cognitive tests do not have the same efficacy as prices. Accordingly, it is best to look at multiple sources, including CREDO, niche.com, GreatSchools.org, or the school report card from your state. And when dealing with probabilities, levels of precision must be reasonable.

However, school reputations are what the scouting department used to do. Instead, for both childcare and education, declare independence, define the goals that will profit your children, discover reliable information, calculate your spending capacity, and be flexible with strategy.

The unholy alliance of popes, bishops, kings and dukes was at the peak of power for the longest time in the last millennium. Yet the wealth creators were forced to take part in this system and become pragmatists to keep their businesses running. These kinds of pragmatist deals with government continue to run business decisions. Yet free flow of capital drives abundance toward people who enjoy that abundance like you and me.

The inspiration for this series is the Ordinary Abundance website — and would urge you to check it out for yourself and marvel at the extraordinary ordinary abundance of modern life.

For further information, please read my book The Moneyball Method: A Middle-Class Manifesto for Objective Investing, now out on Kindle.

“Affordability” is among the top political controversies since the 2020 economic lockdowns unleashed historic price inflation. Besides energy that is affected by other causes, housing, groceries, and child care dominate the conversation. But always on the radar is the product and industry that attracts universal scrutiny and condemnation: prescription drug prices.

For background, when producers and traders are free to produce and trade, rising prices are a signal of supply shortages and falling prices signal surpluses. In turn, that creates a ripple effect among supply networks, including alternatives, that resolve the issue most efficiently. But when prices are manipulated by the force of regulation, subsidies, tariffs, antitrust, and class-action lawsuits, price signals become terribly complex.

On top of that, the Food and Drug Administration (FDA) assigns an 11-digit National Drug Code (NDC) number with dozens of possibilities for each active ingredient. Then the Centers for Medicare and Medicaid Services (CMS) assigns Level II J and Q codes for clinical settings and newer drugs. There are other systems, but these are used most for billing in the United States.

A widely used and pricey example is the anticoagulant (blood thinner) Eliquis. The wholesale acquisition price (WAC) is $521 per month, the Medicare maximum fair price (MFP) is $231, the pharmacy benefit manager (PBM) price is also negotiated, the Medicaid net price is a 50% discount plus state rebates, the discount card cash price is also negotiated to $231, and then there is the nearly free 340B price to charitable hospitals, who then resell these drugs at prices similar to above.

In my case, 90-day refills are charged wildly different out-of-pocket costs depending on the time of year and my drug plan’s deductible and copays. And if my prescription was classified as a controlled substance, refills could be even more complicated. Regardless, no one knows their true costs, and what costs me over $1000 per year out of pocket plus insurance premiums is free to millions of people on Medicaid.

In any event, when prescription drugs or normally priced goods and services increase rapidly, or they are deemed too high for the politically correct standard of the day, producers and traders will be demonized for price gouging. And in highly regulated industries like education, housing, food, and medicine, the producers and traders — the only ones creating value — will become the targets of the “humanitarians” of the State and their media foghorns.

But this also applies to falling prices. On September 18, 2026, the Trump administration released this: Fact Sheet: President Donald J. Trump Announces Lower Drug Prices for All 50 State Medicaid Programs - and it reads:

Under the GENEROUS Medicaid Payment Model, participating pharmaceutical manufacturers will provide State Medicaid programs with rebates on expensive brand-name drugs to ensure the final price to Medicaid does not exceed the MFN price.

The MFN price is “Most Favored Nation,” and in essence, state Medicaid bureaucracies will be reimbursed so that the Trump administration can claim victory over foreign discounts “while maintaining coverage for the most vulnerable.” Lost in the messaging is those of us who are not Medicaid-dependent and paying for Medicaid dependents will get no relief from the heavily manipulated drug prices.

The point is that the pharma price mechanism has become so polluted with State intrusion that it is impossible to know what anything really costs. Capitalizing on this mess, the Council of Economic Advisors released a chart on September 20, 2026, to illustrate changes in drug prices during the first 18 months of every presidential administration going back to Nixon.

Using Consumer Price Index (CPI) data from the Bureau of Labor Statistics (BLS), it appears that consumer drug prices have fallen about 4% during Trump’s second term - the first and only decline for the first 18 months of a presidency in almost 60 years. Yay. But, contrary to the common wisdom of the State and their academics beholden to GDP, consumer spending accounts for only about 35% of economic activity. Digging deeper into the CPI calculation is investment banking firm Bourne Partners:

The CPI data for prescription drugs reflects what pharmacies actually collect. As such, channel and mix can heavily influence the index even when list prices are stable (or rising). Also, when a branded drug loses patent protection... the timing of patent expirations can mechanically affect the CPI calculations.

But like all things related to economics and prices these days, the obsession with the trees that don’t really matter is intended to obscure the forest. As reported by drugchannels, consumers only pay 12% of the total cost. Government Medicare, Medicaid, Veterans Administration, and CHIP programs pay 51%, and private medical insurance pays the remaining 37%.

Essentially, 88% of drug prices are paid by third parties who are not the end user and will not exercise the same due diligence over need and quality that naturally occurs when someone is spending their own money on themselves. In addition to this horribly distorted price mechanism, the costs associated with getting new drugs through clinical trials and approval can be astronomical.

However, this is difficult to quantify as the line between research and development and regulatory compliance is blurred. The widely used industry study from Tufts Center for the Study of Drug Development is $2.6 billion, including the cost of capital and the cost of failed candidates. Two other studies put the average cost of new drug development at $200 million to $500 million, but even this cannot be attributed to FDA compliance alone.

Individual clinical trials mandated by the FDA are far less than that, but that avoids the critical question. It is a matter of political liberty and individual sovereignty. Anyone facing grave circumstances — or not — has the right to experimental drugs and treatment options regardless of government policy. How many millions of lives may have been improved and lengthened without the heavy hand of self-righteous humanitarians with lifetime pensions and benefits?

No matter what you hear, drug prices are not coming down, and pharmaceutical and insurance companies are not the villains. More importantly, it’s impossible to know what amazing pharmaceuticals and treatments would be available for mass distribution if the capital destroyed by compliance costs had been invested in research and development by profit-seeking companies.

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As proven by Adam Smith in his 18th century reporting and teaching, codified in An Inquiry Into the Nature and Causes of the Wealth of Nations, everything becomes more affordable in economies that specialize. A prime example is the availability of his book on Amazon: paperback $7.10, Kindle $.99.

And everything imaginable and not yet imagined becomes more available with ever greater savings by more productive people, but there’s a catch. Money must accumulate with investors who find the people with the ideas and the talent for new specialties. Naturally, that includes chemistry, biology, imaging, and genomics. Economies are people. Both operate best without force.

To satisfy the needs of everyone — regardless of ability to pay — capital must be freed from government destruction. This will inevitably lead to greater advances in medicine and greater funding of the charitable enterprises that voluntarily assist people who are in need — through no fault of their own — and otherwise.

And it will also lead to a wider variety of choices for the purchase of a wider variety of pharma and diagnostic services. A marvelous step in that direction is health savings accounts (HSAs) in America. These allow for tax-deductible contributions; investment earnings and withdrawals are income tax-free; qualified expenses include a broad range of deductibles, over-the-counter medicine, and dental and vision.

But there are limits to the amounts that can be contributed; you must be enrolled in a high-deductible health insurance plan; you cannot be claimed as a dependent on someone else’s tax return, or have other insurance. Even without income eligibility limits, these restrictions are arbitrary and add to the complexity of medical pricing - including the time and money of tax consulting and filing returns. In effect, HSAs have become qualified retirement plan vehicles for people who can afford to pay their deductibles and copays out of pocket.

That’s not a bad thing, but the phenomenon exposes the contradictions and abuse of the State’s holy trinity: income taxes, price fixing, and single payer systems. However, a subscription service for the next new Netflix, YouTube, or Google accounts of prescribed pharma and diagnostics is easily imaginable — but only if and when the State gets the hell out of the way.

On September 17th, the mayor of Cincinnati, Ohio told his live audience of mostly college students that “climate, artificial intelligence and housing are the triple threat” his administration must address for the community. This is what some of our best young adults are being told by respected leaders in government and academia.

The location was the Cintas Center at Xavier University, the mayor is Aftab Pureval, the host was the Williams College of Business — and the program was titled The Affordable Housing Crisis Symposium. In addition to the mayor’s comments, there was a panel discussion with representatives from the city of Cincinnati, the Ohio Senate, the University of Cincinnati, and the LISC Housing non-profit.

Keynoting the event and bringing a rational perspective to Xavier’s students was a presentation from George Mason University economics professor Bryan Caplan. To that end, the last question of the Q & A session from the audience to Professor Caplan was:

You said that current prices for residential housing are above the break-even point for new development, but our mayor demonized institutional investors as predators. What should be the role of institutional investors?

To paraphrase Caplan’s reply: the mayor’s comment about developers slapping a coat of paint on houses and selling them for double or triple the original price is absurd. The mayor was making things up.

Caplan also reported that institutional investors are nearly irrelevant at less than 1% of residential housing, they are more interested in multi-family apartment projects, and large investment companies are best suited for large housing developments. Furthermore, it makes no sense to demand local-only builders. Big, out-of-state companies may be the most reliable and efficient. Amazon is a supreme example - and these companies have a lot more to gain or lose from reputational risks.

Cincinnati’s Mayor

However, Mayor Pureval is not so concerned with reputational risks. So long as he sticks to the PC catchphrases, he doesn’t need to be. The State has no bottom line. But one thing that rings true is his statement that there are zero developments in Cincinnati without subsidies. Housing development is “too expensive without subsidies.”

Yet, whether those subsidies be federal, state, local or a combination of them, the affordability hawks tacitly blame the private sector for the “the housing stock” not keeping up with demand.

At this point, it is reasonable to ask if the correlation between heavy government subsidies and the heavy expense of development is causal. Of course, the answer is yes. Look at education, medical care, childcare and high-speed rail.

It is also reasonable to conclude that the mayor and his cohort do not ask that question. Instead, he stated that the existing housing stock is not being well preserved, but that suggests the urban blight of government subsidies for father-free households. Does he not know that was also secretly caused by the Great Society and War on Poverty initiatives of the 1960s?

Then the mayor made up this whopper: “everyone deserves safe, quality housing.” Paid for by whom and earned according to what? That is also a secret.

Now is a good time to take a step back. In a free society, is it the morally defensible role of municipal governments to confiscate the property of its citizens to subsidize housing and “green energy” projects? Is it not the morally and practically defensible role of government to defend the property rights of its citizens and taxpayers so they can do all of this more efficiently? Emphatically, yes.

Yet nearly every municipality in America has an open-ended mission statement that conforms to Mayor Pureval’s “population growth is the #1 municipal goal.” Why do they say and believe that? More property tax, employment tax, and service fee payers help balance the books that will never be balanced - and the growth is a tacit endorsement of their utopian dreams.

Of course, Pureval has a plan. He actually said this: “create capital,” which really means coercing and confiscating capital. And he followed that up with: “There is not going to be a data center built in Cincinnati while I am here.” He means that too, by golly, and went on to say that Cincinnati doesn’t have the square footage, but it is “a threat and concern in rural areas.” Phew! But to the mayor, the housing crisis is real and not the fault of the city government:

The lack of housing is driving up property taxes. It is the lack of housing that is driving up rents.

Another whopper. The city cannot be held responsible for its chronic overspending and all of it is the fault of the private sector that did not keep up with demand. Never mind that nearly all of the higher residential prices were caused by lockdowns during the Covid virus government panic and the rest can be attributed to zoning regulations and subsidies.

Unfortunately, there was not a developer or institutional investor on the panel, but Mayor Pureval can thank me for the question to Professor Caplan that closed the symposium. Someone had to do it. But enough about him.

Panel of Experts

Fortunately, the panel discussion began with a definition for “affordable housing” from Kristen Baker, Executive Director of LISC Greater Cincinnati - a nonprofit intermediary between private capital, public funds and new housing ideas from local leadership. Voluntary, privately funded programming is always best. Generally speaking, housing expenses that do not exceed 30% of a household’s gross monthly income is considered affordable.

Naturally, that is a moving target depending on income - and there is an incentive to earn as little as possible to qualify for subsidized housing assistance. Therein lies the rub that has plagued redistribution schemes since the beginning of time. You will be penalized if you become more productive. Subsidies incentivize need.

And that was reinforced by State Senator Michele Reynolds who claimed: “Housing is not a political issue, it is a humanitarian issue.” But if it’s not a political issue, why is it one of the top political issues of the decade? If you don’t believe me, ask Mayor Pureval who, according to his bio for his conference, “has made equitable economic growth a top priority of his administration.”

If it were a humanitarian issue, everyone on the panel and the mayor would respect the humanity of each individual as a volitional being with amazing potential for productivity and pride. But that’s not the case, so let’s decipher that. Equitable means everyone deserves what everyone has earned - meaning the individual must submit to the herd and the State has free money.

A good part of the discussion concerned the stigma associated with “affordable housing” and the resistance its gets from the “not in my back yard” mentality of taxpayers living in neighborhoods zoned for single family houses. However, government housing has earned its bad rap and these regulations have been on the books for decades.

In addition, the recent spike in prices has nothing to do with that. It is the market telling us that the “American dream” of home ownership is about political power, not economic power.

Confirming this, Moderator Mack Mariani asked the panel to address “the socioeconomic and environmental challenges” that contribute to their housing affordability crisis. Bear in mind, “socioeconomic” and “environmental” can mean anything. To add to the ambiguity, University of Cincinnati Real Estate professor Gary Painter declared: “all of these departments seeking the public good can be enhanced.”

Notwithstanding the fact there is no such thing as “the public good,” enhancing these departments ignores their own unaffordability and irrelevance.

Doubling down on that, Painter asserted that “regulation must anticipate technological changes.” You cannot make this up. To anticipate and be prepared for innovation is the challenge of every entrepreneurial spirit with skin in the game, investors to reward, customers to please and talent to maintain - everywhere and always. If they don’t succeed, they fail. Yet, State university real estate professors have no such incentive or risk of failure.

Saving the best for last, Oliver Kroner, Director of Cincinnati’s Office of Environment and Sustainability said that “tax levies to support rapid transit are well intentioned.” Oh, good. And regarding environmental housing mandates, “I am a big fan of what’s happening in Minneapolis.” Oh, good

Radical Reality

Among Professor Caplan’s ideas grounded in evidence was the expensive symbolism of bicycle lanes and the expense of free parking mandated by building codes. But most of all, the huge expense of zoning regulations contributes to housing costs that would be much lower under free-market conditions.

And Caplan suggested that if these humanitarians were truly concerned with helping “the poor” there would be tolls charged for highway use that would reduce congestion during peak rush hour traffic for their “working class” constituents.

To the question about the importance of the “social capital of community” having greater value than new development, Caplan replied it is a myth. Most people prefer the company of their family, co-workers, and recreational friends than they do their neighbors. To quantify the true value of that “social capital” all you have to do is measure the value of what causes people to move out. The same is true for poorer people living in lower quality homes to save money as wealthier people paying up for the positive value of the urban center package.

In essence, markets don’t fail and money demands our best. But to fully understand Caplan’s ideas, his book titled Build, Baby, Build: The Science and Ethics of Housing Regulation is the best resource. Unfortunately, every bureaucrat on this “housing affordability crisis” bandwagon has little understanding of prices as information, free markets as efficient, or profits as justice. And driving that lack of awareness is the illusion of free money.

But for us, it is important to understand the true cause of these issues (intrusion), the true purpose of the political rhetoric (power), and the best trade-offs for your personal circumstances (independence). America is the greatest society with the brightest future the world has ever known.

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This is Mark Shupe on the Third Episode of Season 2 of the Moneyball Method Podcast. Today I would like to talk to you about how Economic Power is Enhanced When Capital is Free to Find Talent. This talk continues with the rise of the Dutch Golden Age and how the Dutch Fluyt merchant ship wasn’t their last innovation. Picking up from where we left off last week, I keep exploring further inventions from centuries ago. More boats, means more goods and more creative control rather than everyone just wait around to use the 2 boats that someone else owned.

The inspiration for this series is the Ordinary Abundance website - and would urge you to check it out for yourself and marvel at the extraordinary ordinary abundance of modern life.

For further information, please read my book The Moneyball Method: A Middle-Class Manifesto for Objective Investing, now out on Kindle.

In his 2005 book titled Moneyball - The Art of Winning an Unfair Game, author Michael Lewis chronicled the Oakland Athletics 20 game winning streak in 2002 with the second lowest payroll in the Major Leagues. To accomplish that, General Manager Billy Beane had learned a radical new formula for evaluating baseball talent.

He and assistant GM Paul dePodesta used the philosophy of Bill James and his Baseball Abstract newsletter and took it to the level of implementation in the 2002 player draft. James had discovered that the common wisdom for evaluating talent did not tell the truth about baseball success. The way Lewis tells it in his book, while other small market teams were rolling the dice on high school players at the craps tables, the Oakland A’s had become card counters at the blackjack table for minor league and college players. They had information that correlated to success.

What they were doing was turning the odds in their favor against the owners of the casino. In this case, the teams in the biggest cities were the house - and the odds were in their favor because they had the biggest payrolls for player development.

Of course, every gambler knows the casino has an advantage. They use the laws of large numbers and they program the rules of each game to favor the house - meaning themselves. However, a player can improve their odds against the casino by playing games with a thin edge - like blackjack, and by counting the cards played to know what remains in the unplayed part of the deck.

The Card Counter

But to do this consistently takes experience, discipline and capital. Even then, to walk away from the blackjack table with a huge profit is an outlier event. To clarify, outlier events are so rare that they fall at the extreme ends of normal distributions of outcomes. And in a log normal bell curve distribution, two standard deviations comprise 95% of all outcomes. The remaining 5% are split equally at either end.

This is where outlier events begin to show up - and that is important because outlier events change lives. What happens within one standard deviation, which comprises 68% of outcomes in normal distributions, doesn’t really matter.

In contrast, a card counter who scored a huge profit and got a lot of publicity was Don Johnson’s haul in 2012. According to The Atlantic, he walked away with $6 million in one night at the Tropicana in Atlantic City. In previous outings he won $5 million counting cards at the high rollers blackjack table at Borgata, another $4 million at Caesars before that, and his tactics game day tactics were written up as:

He was neither nervous nor excited. Johnson plays a long game, so the ups and downs of individual hands, even big swings like this one, don’t matter that much to him. He is a veteran player. Little interferes with his concentration. He doesn’t get rattled. With him, it’s all about the math, and he knows it cold.

At the Tropicana Johnson was playing a hand every minute, betting $100,000 per hand, won $800,000 on one hand - and $1.2 million total on a three-hand sequence. For him, these were not outlier events, but how is that possible?

Objective Information

To me, Johnson’s philosophy and process were much like Moneyball - both in baseball and in personal finance. Not only did the Oakland A’s minimize tactics like base stealing that might cost the inning, but objective investors minimize tactics like adding alpha or beta for outperformance that might cost spending capacity. In both cases, the tools for maximizing the odds of success were in place.

But it was not only Johnson’s game day tactics that raked in $15 - $20 million over a two-year period. His strategy was in place before he was ever dealt a card. He knew that casinos were desperate for high-stakes gamblers in the aftermath of the Great Recession. And as a professional himself, he knew casino math as well as anyone.

In that context, accommodations were made to high rollers to incentivize their patronage. One of those concessions was loss rebates. Johnson may have qualified for up to 20% forgiveness on losses incurred during each gambling session. That is a significant shift in the distribution of outcomes.

There were also rules variations such as a lesser number of decks from which the dealer was distributing cards. For card counters, that is significant for situational awareness. Also possible were changes in the total on which dealers must hit or stand, plus more liberal rules for splitting cards or doubling down. With all of this, an increase in bet limits would compound these player advantages.

However, it cannot be stressed enough that knowledge, discipline and capital are essential for the kind of success described above. The laws of large numbers prevail in gambling casinos and there had to be accountability for the casino managers who approved these negotiations.

The Stock Market

The temptation here is to equate blackjack card counters with stock market analysts and amateur stock pickers. And in that spirit, it must be stressed that the casino is a closed system. The rules are known in advance, each participant has access to the knowledge that exists during the game - including the uncertainty of games of chance, and for every winner there is a loser.

However, the US stock market is a complex system, meaning that there are millions of participants, billions of co-dependent variables, the rules change with every government regulation and tax scheme, no one has but a tiny fraction of the knowledge that is contained in prices - and it is a compounding sum game. However, the game day tactics of Don Johnson ring as true for Billy Beane on draft day as they do for an objective investor’s relationship with the stock market:

So, let’s break down The Atlantic quote from above - and do it in the context of the objective investor. We don’t get nervous or excited about things we do not control and cannot predict. We play the long game of risk capacity, spending capacity and funding status. The ups and downs of stock market values are opportunities to take risk off the table or rebalance at lower prices. We act like veterans who understand the American economy is the greatest wealth building engine in world history.

The Secular Foxhole

But is there a contradiction here? Are the capital markets, particularly the stock market, like a casino or not? I was directly asked this question on The Secular Foxhole podcast released on September 2, 2026. Here is the transcript:

Blair But I have one final question that I always ask every economist that comes on the show. Is the stock market a casino? Mark: No. Capital is attracted to talent and the stock market is driven by earnings expectations. And in the short run, it sure seems to have some casino aspects to it. But that’s an interesting idea. Casino. What I’m trying to do with The Moneyball Method is give the investor the same advantage as the casino.

To be clear, I am not an economist, but the definitions of both casinos and capital markets include strong elements of uncertainty. Another similarity is the institutions that rely on the patronage of their customers, but that offers a major distinction. For casinos, it is their owners and management that have the edge. But for capital markets, no one owns it.

Yet, the economists, strategists, and analysts who support State monetary and regulatory agencies are getting a piece of the action. However, Billy Beane dismissed the scouts, Don Johnson leveraged the casino owners - and objective investors ignore these magical market whisperers.

Ultimately, nothing interferes with our defined objectives unless values and priorities change with circumstances. With us, it’s all about the objective evidence of markets and the objective data of the important goals we plan to achieve. We know it cold. We are the house. The odds are in our favor.

In the 2026 arena of American politics, “affordability” as a “crisis” is being accepted by nearly every commentator – regardless of political affiliation. That is because the nominal price of residential homes outside of high demand urban metros have increased about 120 — 130% since 2000. And the same is true for the median 2 bedroom apartments, but those are nominal prices.

The inflation adjusted increases are closer to 35%, meaning the majority of the spike in prices were caused by various government policies, and we cannot really isolate which policy caused what spike.

But regardless of cause, “affordability” is being leveraged with great success by political candidates who will “fix” the problems caused by government policy by fixing the supply side with government policy. However, these are candidates with malice for the supply side — and for the principles of individual rights, political liberty and moral justice that animate the supply side.

In the long run, they will fail – and badly. But in the short run, it is best to understand the causes and decapitate their prospects for short-term success. And to that end, I will discuss two ideas for solving problems that have withstood the test of time – and do it in the context of policy pundits, private producers and political panderers. But first, the provable premises.

Provable Premises

My first premise is known as the Pareto Principle — or the 80/20 rule. The second is Ockham’s Razor — or the principle of parsimony. To be clear, these are not laws of nature or principles with universal application, but when used in the proper context, they are ideas for solving problems that have withstood the test of time.

Regarding the Pareto Principle, it was named for sociologist Vilfredo Pareto, formulated by engineer Joseph M. Juran, and he used it as a tool for understanding quality control and management systems. To clarify misunderstandings, Juran summarizes the rule as “the vital few and the useful many,” but to me, it is doubtful that applies to State bureaucracies.

Among other things, the 80/20 rule captures the primary sources for business revenue, productive time and mechanized efficiency: 80% of the revenue is earned by 20% of the sales force, 80% of productivity comes from the 20% of the time worked, and 80% of mechanical breakdowns are caused by 20% of system flaws.

Regarding Ockham’s Razor (named for 14th century theologian William of Ockham), it states that with competing theories for certain circumstances, the simpler explanation is the most likely. In other words, strip away the unnecessary ideas to solve a problem — the solution with the fewest variables is likely the best.

And the idea for essentializing all problems can be traced to other heroes of Western civilization such as John Duns Scotus, Maimonides, and Aristotle.

Policy Pundits

My third premise is prices rise when supply falls (other variables held constant). With that in mind, two Vanderbilt University law professors published an academic paper titled War Housing in July 2026. Written by Christopher Serkin and Daniel Sharfenstein, the concluding sentence to the fourth paragraph frames the problem this way:

“It is time to start acting like we are in an actual housing crisis and to explore policies that go beyond loosening zoning and hoping that private developers will satisfy our housing needs.”

Yes, Serkin and Sharfenstein are now jumping on the regulated supply bandwagon — and zoning restrictions add to higher prices and limited supply, but those have been around for decades. And if you’re going to zoom in on zoning, what about lending quotas, rent controls, property taxes, and tax credits? Those have also been around for decades and they all have the same primary cause: the government intrusion of central planning.

The fourth premise is that prices rise when demand rises (other variables held constant). Naturally, a growing population will increase demand, but the authors are critical of private developers who must deal with the trade tariffs, loan regulations, “green” construction mandates, and low-income quotas that impede their ability to increase supply. And those have been around for decades and have the same cause: the government intrusion of central planning.

Naturally, these two law professors at Vanderbilt University have a solution to the supply problem, but it is one that utilizes the 20% of flaws that trigger 80% of the problems:

“Taking the housing crisis seriously means focusing not just on deregulating land use controls but on activating the full arsenal of government tools and programs. We should return to a kind of war footing to solve our housing problems.”

In this 70 page report with 286 footnotes, Serkin and Sharfenstein characterize World War II federal housing agencies as “responsive landlords.” And with their newly discovered “sense of community,” federal authorities with no skin in the game seized their “opportunity to innovate” while “taking regional aesthetics into account.” Furthermore, the authors rely on housing activist Dorothy Rosenman who wrote in 1945:

“It is said that lumbermen, plumbing supplies houses, furnace manufacturers, electrical contractors, insurance companies, all unite in a witchlike profit dance around the unborn house . . . The root of the evil of excess costs does not usually lie with one individual. It lies mainly in the multiplication of uncoordinated interests, each with a separate ‘take’.”

Private Producers

These are the producers, suppliers, and competitors with skin in the game. They are concrete examples of a specialized economy that increases productivity, lowers prices, and provides housing options for the likes of Rosenman, Serkin and Sharfenstein. Furthermore, they are unassailable proof for my fifth premise: supply creates its own demand.

Without these producers, there is no government tax revenue, there is no government housing, and there are no law school professors writing papers extolling government housing projects that were never built, never built at scale, or were temporary prefab shacks. Or in the politically correct jargon of War Housing, “demountable.”

One of those affordable housing projects for World War II industrial workers was commissioned to famed architect Frank Lloyd Wright. These were four-apartment structures of prefabricated materials arranged in a “cloverleaf” pattern. The brilliant design allowed for privacy, sundecks, children’s play areas and garages in the center of each building — except for one minor detail — as reported by The Argument:

“No, because it doesn’t exist. According to Wright’s own account, Massachusetts architects were so annoyed at having been passed over for the project that they complained to their federal representatives. Unwilling to turn over his work to other architects, Wright then refused to sell his plans to the government and the Pittsfield project was never built.”

By extension, it seems that Frank Lloyd Wright was united in Rosenman’s “witchlike profit dance” and “the root of the evil of excess costs.” Or maybe it more accurately describes the political panderers in the White House and US Congress. That is the simplest explanation for the politically manufactured “housing affordability crisis.”

Political Panderers

Also in July of this year, the 21st Century ROAD to Housing Act became law. Proving that neither Democratic and Republican party loyalists will let a crisis go to waste, it passed the US Senate 85-5 and the US House of Representatives 358-32. At least it can be fun to parse the acronyms of these monstrosities — and in this case it is Renewing Opportunity in the American Dream.

And where was this American Dream manufactured? As Serkin and Sharfenstein’s paper tells us about the interwar period of the 1930s:

“The Department of Labor mounted “Own Your Own Home” campaigns, publicizing the National Association of Real Estate Boards’ efforts to attract new homebuyers. Social reformers believed that encouraging workers to become homeowners would increase productivity, decrease absenteeism, and give workers a stake in their communities.”

Essentially, the 2026 Housing Act bans large real estate investment companies — those with more than 350 single-family homes in their portfolio, from purchasing additional existing homes. Ostensibly, this creates supply for individual home buyers that would have been transferred to the rental market. At the same time, the Act does not prevent institutional investors from building new homes and adding to their rental portfolio or divesting any of their existing housing stock.

The way the policy pundits and political panderers tell it, developers and investors created the “housing affordability crisis” by not meeting consumer demands and by outbidding consumers for existing homes. But let’s cash the reality check. According to UBS Wealth Management:

When looking across the US, institutional holdings of single-family homes remain at about 0.35% of the housing stock and institutional investors only account for about 3.0% of single-family rentals (SFR), according to BofA. Large institutional players such as Blackstone only hold about 0.06% of single-family homes, and the majority of SFRs are actually held by local mom-and-pop landlords.

Pareto’s Principle

What the story above illustrates is that more than 80% of the illustrated problems are caused by less than 20% of the people — and they work for the government. As Springer Nature reports, public sector employment (federal, state, and local governments) represents 14.5% of the workforce. Yet, it is the other 85.5% that pay for everything and get the blame. Or as Rocky the Squirrel said, “Boy, they don’t call him Wrong Way Peachfuzz for nothing!” And Bullwinkle replied, “You mean they gotta pay?”

In 2024, Blackstone announced a $1 billion commitment to new single family home construction to complement their $10 billion investment in the United States and Canada. In 2024, Pretium committed $1.5 billion to its single family fund and has invested $2.6 billion since 2020 in its build to rent portfolio. And since 2020, Invitation Homes has invested almost $2 billion in build to rent and acquisitions.

As usual, the most likely explanation is the one with the fewest variables: independent producers with skin in the game earning profits driven by the price mechanism of free markets will fix the supply problem — only if there is one. But there is another message that market prices for residential housing are sending: owning a home is not a good investment and it could very well limit your choices for greater opportunities.

Prices are information. Prices send signals. Instead of complaining about prices, we are better served learning how they work and what they may be telling us.

It is impossible to quantify the time and material luxuries we enjoy in the 21st century because of economic power replacing political power, because of political liberty replacing feudalism, because of capitalism replacing tribal cultures as a driving force.

The inspiration for this series is this wonderful website. I would urge you to check it out for yourself and marvel at the extraordinary ordinary abundance of modern life.

For further information, please read my book The Moneyball Method: A Middle-Class Manifesto for Objective Investing, now out on Kindle.

Editor’s Note: The Team here at Moneyball Method would like to wish Mark Shupe a Happy 70th Birthday! He’s a Jolly Good Fellow! And so say all of us!

On November 19, 1863, President Abraham Lincoln delivered his most famous speech. The location was the civil war battlefield at Gettysburg, Pennsylvania – about 100 miles east of the Shanksville Pennsylvania field where Todd Beamer led the battle for United flight 93 that ended 138 years later. And today, these words of President Lincoln will be echoed in New York City, Shanksville, Washington DC and across America:

We have come to dedicate a portion of that field as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this.

Two years later, and for the benefit of humanity, the American Civil War ended with a hard-fought victory for the North. But to the detriment of humanity, the war by the savages to end civilization has not ended in victory for the West.

Lincoln and General Sherman did not appease the enemy. They understood the nature and purpose of war. It is bad, really bad – and it must be won, decisively and quickly. Presidents Bush, Obama, Trump and Biden do not understand the nature and purpose of war. As a result, they appease and subsidize the enemies of civilization.

However, nearly no one in America understands the nature and purpose of civilization. Most people have a vague understanding of it, something like: treating others with decency with courts to settle disputes and police to defend people from violence, But to define “civilization” explicitly is another matter. To help in that regard, philosopher and novelist Ayn Rand gave us a concise and coherent definition:

Civilization is the progress toward a society of privacy. The savage’s whole existence is public, ruled by the laws of his tribe. Civilization is the process of setting man free from men.

Fortunately for me, the people working in World Trade Center Tower Two, and every freedom loving American (citizenship not required), there is one man among many men and women who deserve to be honored today. Rick Rescorla, head of security at Morgan Stanley, understood the meaning and purpose of civilization – and he understood the purpose and the means of the savages.

Twenty-five years ago, I was employed by Morgan Stanley in Cincinnati, Ohio and I had five trainees among hundreds on the 62nd floor of Tower Two (north tower) when the first plane hit the south tower. In total, Morgan Stanley had about 2000 employees on 22 floors of Tower Two and WTC Five. All but nine got out in one piece. Rescorla was one of the nine and last seen going up to help clear the building.

Back in Cincinnati, we didn’t know any more than anyone else. When the first plane struck, it seemed like a horrible accident. My branch manager said all that needed to be said at the time, “This is really bad.” He had been at the World Trade Center for the 1993 bombing by these Muslim savages. When the second plane hit, there was nothing to say, we knew it: this was war.

Then my branch manager said the only other thing that needed to be said, “The New York City police and fire departments are the best in the world. Go home.” I stayed for a few hours and took a few phone calls from the parents of the trainees in New York. We were hoping for the best, but there was no communication from the City. Fortunately, someone in the Midwest region was able to reach the head of the training department at the Midtown hotel and relay messages. All of the trainees had all found their way back. Rick Rescorla had taken care of us.

Certainly, there are many thousands of stories more compelling than mine - and the point of this article is to do justice to the concepts of civilization, war, individualism and savages.

If civilization is “the process of setting men free from men,” then it stands to reason that war is the process of savagery inflicted on men. And it is. War is the total absence of civilization. Yet, if you are civilized, you will inflict savagery on those who initiate war because it is the last resort that must be prosecuted with resolve. The good news is that the real savages are cowards.

Yet the appeasers and subsidizers of the savages think of war as a tool for diplomacy. It is not. They think of their adversaries as reasonable. They are not. The culture of the savages demands deception, they are impotent without the cooperation of their victims - and they know it. They worship death, and they know the West chooses life, so they exploit that.

However, a true individualist has reverence for his or her own life - and reverence for the potential of each life and for civilized society. So, what is it about the savages that Western culture does not understand? Moreover, what is about Western culture that is similar to the culture of the savages? Finally, what does it mean to be savage? Put simply, the savage will force your sacrifice to them and Western culture has deemed self-sacrifice a virtue.

In summary, savages use evil to pull humanity below the line where good and evil do not exist. Their goal is to extinguish free will and eradicate independence. For them, that will be achieved by force leading to faith in the worship of death. And in the West, the goal is political power over economic power. For us, that will be achieved by force leading to faith in the worship of the greater good. The greater good or death, suicide or murder. Take your pick.

The consequences of that are real. One major political party in America now welcomes and champions the keffiyeh wearing Muslim savages that own the mayor’s offices in New York City and Dearborn Michigan. So, how do we go about setting men free from men? Where does that begin? With each individual taking ownership of their lives and building on their own virtues of integrity and independence.

In other words, rational principles and reverence for your own life as your primary value - at all costs. And for guidance and inspiration, this kind of reverence was exalted dramatically through the character of Kira Argounova in Ayn Rand’s first novel, We the Living:

Never surrendering, Rick Resorla, Todd Beamer and countless other American heroes at Ground Zero lived undefeated. They refused to sacrifice themselves. At that moment and for eternity, only life mattered.

Multi-billion dollar tariff refunds entered the headlines in August – alongside data center construction and Democratic party candidates who win with their repudiation of property rights. More specifically, about $104 billion has been returned to the likes of Walmart, Apple, Ford, Target, Home Depot, Nike, Amazon, and Lowes.

But this didn’t happen by itself. In February, the United States Supreme Court ordered the refunds in a decision that repudiated President Trump’s use of the 1977 International Emergency Economic Powers Act. However, the Trump administration claims about an economic emergency were only political desperation and fueled by bad information and rotten advice about international balance of trade arithmetic.

In the double entry accounting system, these current account deficits are offset by capital account surpluses, all of the transactions are voluntary and mutually beneficial, and if foreign imports are subsidized by foreign governments, that is a transfer of wealth to America.

To summarize, the approvals represent 60% of the $166 billion total that was recognized for refund by Customs and Border Protection (CPB) - and most of that is being returned to the largest importers first. This is not a windfall, it is money that was confiscated and is being returned. As such, the refunds must be reported as income, but it is the quarterly earnings reports for these companies that are generating the headlines.

For background, the Trump administration announced “reciprocal tariffs” in April 2025 on dozens of countries. They include all of America’s important trading partners, and one justification is the tariffs imposed by these governments on American exports. That is why they are named “reciprocal.” The rationalization is that the revenue to the federal government will help reduce budget deficits, but more likely, the additional revenue will increase borrowing capacity.

Regardless of government spokesman or media hype, tariffs are a tax imposed on businesses that import raw materials, value-added goods, and consumer products - depending on which industries the president wants to reward or punish. It is protectionism and it is the State picking winners and losers. And as an outlay of cash, tariffs increase costs for manufacturers, increase prices for consumers, and decrease prosperity for the entire society.

In a balanced report from Yahoo Finance, some of the ideas being considered by retailers to best deploy the cash reserves were summarized by senior director David Silverman at Fitch Ratings:

“The upside is that these companies have spent the last year plus thinking about mitigation strategies, thinking about supply chain shifts, thinking about merchandising, … and at least now to the extent that there are updated tariffs …these companies have built somewhat of a playbook to figure out what to do about them.”

For the company receiving the refunds, it is a liquidity event and a net loss. There are costs attached to calculating their tariff liability, remitting the funds to the CPB, loss of interest income, higher prices paid for inventory to avoid the tariffs, and costs associated with calculating and applying for the refunds. Yet, there are also costs related to corporate communications to mitigate the negative publicity for receiving their earned property.

Why? Because when economic inequality is universally accepted as a problem for governments to solve, the world wide web will attract posts like this on X:

“Walmart just received a $2.9 billion dollar tariff refund, massively boosting the company’s profits. Regular people paid the cost of tariffs by and large across America. But now corporations are getting huge checks from the government, while working people get nothing.”

Piling on, here is the August 22nd headline from CNN Business:

“Tariffs raised the prices you paid. Most businesses won’t be passing tariffs refunds back to you.”

Yes, Walmart, Apple, Ford, Target, Home Depot, Nike, Amazon, and Lowes will manage their cash differently, but they are net losers after compliance, accounting, and finance costs are tallied - and customers are net winners when the refunds are processed. Regardless, each of these companies are miniscule by comparison to the leviathan governments imposing tariffs on the transactions that benefit everyone.

As to the rhetoric, “regular people, by and large, huge checks and working people” are meaningless phrases and all too much noise. The very existence of each retailer has improved the lives (low prices, endless variety) of everyone who has visited, passed by, lived near, or seen an ad from these businesses. Just ask a few of the foreign visitors to America for the World Cup earlier this summer how much they love the selections and prices at America’s big box stores.

This is what profit striving companies always do: think about mitigation strategies for arbitrary government edicts, supply chain shifts, merchandising, and build a playbook. But that is almost impossible when there are political executives like President Trump and Canada’s Prime Minister Carney wielding the force of government in arbitrary ways, as the Wall Street Journal reported on August 24, 2026:

“I’ve basically gotten a Ph.D. over the last year in tariffs because I feel like that’s my sole job,” Mary Buchzeiger, CEO of the Michigan-based auto parts supplier Lucerne International. Everybody is paralyzed with fear right now because of these changing regulatory tides . . it’s impossible to make good plans and solid plans and be able to move forward.”

To conclude, President Trump’s tariff policy destroys capital, raises prices, and the money is paid by the importers of record. Those companies are prolific distributors of variety at better prices than any time in the history of the world. And while it is morally and practically superior for tariff refunds to be received by the importers of record, the greatest economic atrocity is the uncertainty that prevents entrepreneurs from doing what they do best - invest and plan for an amazing future.

To put this in perspective, what could have been achieved if the private sector was not devoting talent and capital to tariff compliance, antitrust avoidance, diversity hiring, inflated medical benefits, university endowments, professional lobbyists, and social security matching? On top of that, the economic and social costs of President Trump’s wild tariff policies are impossible to calculate, but could damage entire industries.

On August 25th, The Economist published a less than fascinating article titled What Makes a Great Investor? Naturally, that is a compelling title — the concept is vague, subjective and aspirational. Even better, it gives The Economist license to define “great investors” as they see fit. It’s their publication and they deified themselves as The Economist, after all.

Right out of the gate, the article did not disappoint with this 1992 quote and story about Quantum hedge fund manager Stanley Druckenmiller speaking to his boss, George Soros:

George, I’m going to sell $5.5bn-worth of British pounds tonight and buy Deutsche marks.

The idea was that the Bank of England was trying to sustain an unsustainable exchange-rate peg which speculative pressure could break, forcing the depreciation of the pound and netting Quantum a huge profit.

This story and its aftermath are relatively well known, but the root cause for this currency arbitrage opportunity is never discussed. On the surface, Druckenmiller and Soros are “great investors” because they discovered potential gains in an overvalued asset and were willing to put their skin in the game. The last part is true and important, but the rest of it is neither great nor investing.

Selfish or Selfless?

Practically speaking, the source code for Soros’ and Druckenmiller’s massive gains was the incompetence of the Bank of England — and by extension, all central bankers. And morally, the Quantum hedge fund trade may be considered selfish — but objectively speaking, it is an example of selflessness.

Selfless because Soros could not have enriched himself without the existence of foreign exchange markets created by economic overlords for the systematic devaluation of money. Furthermore, The Economist doubles down by redefining “investing” as speculation:

Plenty, including Mr Druckenmiller, reckon he thereby demonstrated two cardinal virtues of great investors: the wisdom to spot a winning chance and the nerve to bet the house on it.

Certainly “great investing” involves wisdom, but the ability “to spot a winning chance” presumes omniscience that does not exist — except when the incompetence of others is in play. After all, reality always wins and evil is impotent. But having “the nerve to bet the house on it” presumes clairvoyance — or stupidity. Not surprisingly, The Economist confirms this:

What a great investor really needs is a big dose of luck and a distinctly odd character.

Yet, all economic outlook reports hedge themselves and tell their readers, we are cautiously optimistic, expect continued volatility, but our long-term growth story is intact, and there is the potential for policy errors, but markets are always uncertain.

And The Economist is no different. In this piece alone, it seems that big doses of luck and a distinctly odd character are short-lived and subjective:

Today his would-be successors need luck, too. Most people who work in finance have to be right pretty much all the time. But a stock analyst can have an even lower hit rate and still be considered excellent, since no one can do much better. The fund managers building portfolios from analysts’ recommendations can merely hope to pick the right ones.

In summary, outlier trades — the hugely profitable ones that are equally rare, do not define “great investors,” they define outlier events. However, there are two excellent points in this piece that help define great investors — having skin in the game and anticipating the possibility of outlier events. Those are the ones that occur less than five percent of the time - or two standard deviations from the median historical outcome.

To Make Money for What?

First, a great investor understands the cause, purpose and meaning of money. Next, he respects the information of prices and the elegance of markets. Those two steps are necessary to clean out the fallacies of the State controlled economy: the illusion of free money, the injustice of prices, the inefficiency of markets and the exploitation of profits.

The truly great investors are the angel investors and venture capitalists who expect to lose 90% of the time, but they do not rely on luck. They take calculated risks. Great investors deploy risk capital in value-creating ventures — not in fiat currency futures. And they find talent, anywhere in the world, without regard to the wheel-spinning central bankers fixated on interest rate price fixing and fiat currency manipulation.

For the middle-class, mass market, affluent investors who are great, The Moneyball Method answers the question: to make money for what? And the “what” are the explicitly defined objectives and value-driven strategies that give purpose to every “great investor.” In concrete terms, the objective data for each investor’s cash flow strategy is combined with the objective data of capital market price behavior.

That includes every outlier financial event that has been documented over the last century. Great investors do not ignore these large deviation events — they anticipate their likelihood and calculate their impact in terms of the dollar hit to their net worth.

But most importantly, great investors reverse the traditional “best practices” of those who try to predict the future, beat the market and measure performance looking backward. Beating the market is for authoritarian governments and George Soros. In the end, it fails — and markets do not fail.

Instead, we use the most reliable historical data, anticipate market behavior, measure performance looking into the future, and always know our risk capacity. That builds pride.

Today I would like to start a new series about the ordinary abundance of our daily lives — the inventions that gird our world and the enormous risks in capital that created them for us, and the time and heavy labour they made free. They have created the most valuable commodity for us — time. We couldn’t live without these effeciencies but they are so normal to us, it is impossible to think of an era when they didn’t exist. Join me as I explore the history of abundance in our modern world!

The inspiration for this series is this wonderful website. I would urge you to check it out for yourself and marvel at the extraordinary ordinary abundance of modern life.

For further information, please read my book The Moneyball Method: A Middle-Class Manifesto for Objective Investing, now out on Kindle.