Episode 15: Dancing in the Moonlight
The highlight of my week was watching the “fall” of Jerry Falwell, Jr. There are fewer things in this world that I despise more than a hypocrite, especially religious ones. I could care less what consenting adults do in the privacy of their own home, but don’t publicly condemn behavior under the banner of Christianity and then engage in that behavior. Falwell made headlines earlier this month for posting a bizarre and inappropriate photo on his personal Instagram page of himself and a pregnant woman who was not his wife with their pants undone while on a yacht. Falwell, who is married with children, is the son of the well-known evangelist, Jerry Falwell Sr., who founded Liberty University, the private Christian university in Lynchburg, Virginia. Jerry Jr attended Liberty University, earning a degree in history and religious studies, and later joined the Board of Trustees in 2000 and became University President in 2007.
This week an explosive story surfaced that Becki Falwell, Jerry Jr’s wife, had an eight-year affair with a pool attendant, Giancarlo Granda (you can’t make this stuff up). Granda was 20 years old, and according to an interview on Good Morning America, the Falwells invited him back to their room where Granda and Becki had sex while Jerry Jr watched. The affair went on for many years and is not disputed by the Falwells. However, Jerry Jr claims he was not involved in the tryst, while Granda maintains it was very much a family affair. Falwell resigned from his position at Liberty University this week, and he released the following statement: “I’m leaving because I think I’ve done all I can do. It’s better to leave at the top.” Perhaps Jerry Jr and Anthony Weiner (aka Carlos Danger) can team up for a 2024 run for office.
Hurricane season is in full force. Two significant storms, Marco and Laura, slammed the Gulf region with winds topping 150mph, creating a wake of property destruction and leaving 7,000 homes without power. Three massive CA fires burned over 1.1 million acres on the west coast, forcing more than 250k to evacuate. Two of the three fires are the largest on record for a state known for wildfire, and 14k firefighters, 2,400 engines, and 95 aircraft deployed in response. And in Colorado, the Pine Gulch fire has become the state’s largest wildfire on record, burning 140,000 acres.
Last night concluded the conventions for both parties, and for that, we can all be thankful. I would say we could return to watching sports, but that seems questionable, given all four leagues held walk-outs to protest the Jacob Blake shooting. The conventions were an odd spectacle, given the coronavirus and the state of our country. I covered the Democratic convention in last week’s newsletter, and this week will feature the Party of Lincoln.
Trump promoted the Republican convention would be extremely positive and hopeful. It was not. The one word to describe it is FEAR! All members of the Trump family spoke—The President, First Lady, Ivanka, Don Jr, Eric, and even Tiffany. The family speeches doubled down on the MAGA rhetoric and talked to the core base of supporters. Essentially, the message was to vote Trump or get ready for a liberal dystopia that will raise your taxes, take your guns, open borders, and encourage violence and anarchy. The most shocking speech came from Don Jr, who appeared to be screaming and spit vile and venom towards Biden, branding insults such as “Beijing Biden” and the “Lochness Monster of the Swamp.” There were some excellent speeches, notably Tim Scott, who showed why he is a rising star in the party. Scott has a compelling personal story, radiates positive energy, and focused on policy that polls well with moderates and conservatives.
The big event of the convention was President Trump’s address. The setting was simply spectacular on the White House’s front lawn, with over 1,500 supporters in attendance (and few wearing masks). Trump’s opportunity was to reach out to independents, re-connect with suburbanites, repair the relationship with women and seniors, and change the narrative on his character. Instead, he delivered a powerful speech to his core base and straight-line conservatives, and his message didn’t do much to create a bridge to other groups. Trump mentioned Biden 41 times in his 70-minute speech (whereas Biden did not mention Trump by name a single time), and he attempted to push aside COVID concerns (where his record is weak) and replace it with crime and safety concerns.
My scorecard for the convention notched two “wins” and two “losses” for each side. For the Democrats, Biden checked the boxes of being a mentally capable candidate and a well-liked public servant. In contrast, the Democrats painted Trump as a narcissist and a bully with a track record of distorting facts and telling lies. If the election were a character contest, Biden would win a supermajority of the vote. The Democrats also successfully made a case for the disaster that is COVID and its toll on society and the economy and the failings of the Trump administration to deal with it. On the ledger’s loss side, Democrats made a terrible error by not condemning the riots and violence, raising legitimate security concerns, and creating an exploitable opportunity for Republicans. Lastly, the Democratic convention lacked energy, didn’t spend enough time on policy and relied heavily on celebrities, which likely alienated middle America.
In contrast, the Republican convention had an energetic atmosphere and had the advantage of using the White House as an ideal (albeit illegal) backdrop. After Trump’s speech, the fireworks over the Washington Monument were incredible, and you could not help but have a patriotic feeling. The other positive is the Republican Party effectively branded Biden/Harris as the “Radical Left” with a simple message that voters can understand: a vote for Biden/Harris is the equivalent of cultural and economic suicide. Marketing can often “trump” facts, and the Republicans were creative as always in painting a picture they wanted the American people to see vs. reality. On the negative side, Trump did very little to soften his image. He doubled down on his MAGA base and missed an opportunity to broaden his support, which was critical for his win in 2016. The other negative was the notable absence of some key Republicans from the convention and the reliance on Trump’s family. It felt more like a monarchy than democracy, and that’s not a good look.
My parting thought is the real winners in the convention were women. Michelle Obama and Jill Biden were the best speakers at the Democratic convention, both in content and style. The same goes for the Republicans. Melina Trump had a surprisingly good speech, and Ivanka Trump was also effective and able to deliver a strong message but with a soft, elegant touch. It’s a shame we don’t have a female candidate in the race, but it appears the country is getting closer to breaking that ceiling. Overall, I’m disappointed neither party truly owned “Climate Change” as it’s obvious this is a huge problem that’s not going away. The next stop in the election circus is Trump has agreed to do a live town hall with ABC News anchor George Stephanopoulos on September 15th, where he will field questions from undecided voters. The first debate between Biden and Trump will be in Philadelphia on September 290th.
In economic news, Fed Chairman Powell announced a “major” policy shift on Thursday, saying that it is willing to allow inflation to run above the Fed’s 2% goal “for some time.” It’s an odd statement in that it’s not an action but rather a mindset change. The Fed said four factors influenced their change in position:
Assessment of long term growth rates of the economy, a decline in estimates from 2.5% to 1.8%, mostly due to shifting demographics and smaller gains in productivity
Relative low-interest rates around the world
Pre-COVID low unemployment and the path of getting back to those levels by 2022
Labor participation across all socioeconomic classes and ethnic groups
That’s super, but what does it mean? As a practical matter, the move means the Fed will be less inclined to hike interest rates if/when unemployment falls. The Fed’s sentiment continues to be that they will do whatever they can for as long as needed to support the economy, including tolerating some inflation. It also reinforces that the Fed has continued concerns about deflation, which could have catastrophic consequences long term. The other message it sends is that with interest rates at practically zero, the central bank has few remaining levers to stimulate the economy. The Fed can’t control our nation’s health and wellness and the ability of businesses to open in the face of COVID, nor can they do the job of Congress to pass additional fiscal stimulus to support small businesses and consumers. There are some negative consequences of this “favorable” monetary policy. For starters, it’s not great for savers. The Fed wants to force consumers to spend and look for investment in riskier assets. Furthermore, the policy will compress net interest margins that will impact the financial sector (and potentially push those firms to riskier investments as well). Of course, all of this sets up nicely for the stock market as yield alternatives will be hard to find and increase the risk of an asset bubble. And we all know what eventually happens with bubbles. Lastly, history has shown that while inflation may appear impotent today, it’s hard to put that genie back in the bottle if we have a spike down the road.
On the lighter side, coronavirus can claim yet another victim. Venerable chicken purveyor, KFC, has abandoned its iconic slogan: “finger linkin’ good.” The company had received over 163 complaints about the KFC advert and language, claiming it encouraged irresponsible behavior that might increase the chances of COVID spreading. I’m shocked it took COVID to make a change in a slogan that carries such a disgusting visual.
I. Below are the articles I found interesting the past week:
I coach CEOs and business owners, and one trait that separates exceptional leaders from average ones is a growth mindset. Success in business does not always correlate with strong, effective leadership. Sometimes the market works in your favor, or you get a lucky break, or the opposite can occur. However, it’s the commitment to life-long learning and a desire for personal growth and development that separates the long-term winners from the one-hit wonders.
Everything you need to know about artificial intelligence
What astronauts can teach us about working remotely
Hybrid remote work offers the worst of both worlds
Yes, women could vote after the 19th amendment—but not all women
Six steps to dealing with difficult people
II. Stats that made me go WOW!
- Manhattan rental prices have been pounded by the coronavirus, plummeting more than 10% in July than the same month last year. Queens real estate had a more significant drop, with renters paying almost 15% less in for the same period.
- Warm temperatures in CA produced conditions that created 12,000 lightning strikes in a single week.
III. Name that Tune!
As I write this email, I am listening to “Dancing in the Moonlight” by Toploader. (I hope the birthday girl enjoys the song choice!)
The song was written by Sherman Kelly and released in 1970 as a single by the French-American group, King Harvest, reaching number 13 on the Billboard 100. However, the song became a worldwide hit in 2000 when an English band, Toploader, released a cover of the song, and it achieved multi-Platinum status. While recovering from a vicious attack by a gang, Mr. Kelly wrote the song in which he envisioned an alternate reality filled with peace and harmony. It sounds like he was hitting the morphine drip too much, but we are thankful for his creation. After a six-year separation, Toploader reunited in 2009 and still tour and record music.
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