Is Taxpayer-Funded $150,000 Home Loan Asisstance to Undocumented Immigrants A Good Idea?

 

September 23, 2024

Recently, the California Assembly and State Senate approved AB 1840, a measure introduced by California Assemblyman Dr. Joaquin Arambula (D-Fresno), which would allow undocumented immigrants access to a state program that provides interest-free loans up to $150,000 to cover down payments for new home purchases. The program originally aimed to allow more Californians to own a home.  Unsurprisingly, many media outlets, including X owner Elon Musk, picked up the story and ran with it. Governor Gavin Newsom, cognizant of how this looks to potential voters in a Presidential Primary, has vetoed the bill.

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Assemblyman Arambula created this bill to enhance the California Dream for All (CDA) program. It was designed to give state residents in the lower socioeconomic tiers access to capital to assist their desire to own homes.  According to its website, the CDA is administered and run by the California Housing Finance Agency (CHFA), which generates revenue through mortgage loan repayments, rather than taxpayer money, which proudly says it has a self-sustaining business model. The CHFA uses a concept called the "shared appreciation loan," in that borrowers do not pay interest.  Rather, when they ultimately sell the home, the homeowner only has to pay back the original loan amount, plus 20% of the appreciation of their property. An ABC News story explained that the loan covers 20% of the purchase price, or up to $150,000 to cover a down payment or closing costs.

The article states that the loan must be paired with a 30-year fixed interest rate first mortgage from the CHFA and the recipient of the loan assistance only has to make payments on the shared appreciation loan once the first mortgage is paid off. The program began with an initial amount of $500 million, but the agency blew through $300 million of that money within 11 days. It seems to be a very naked attempt to win the hearts and minds of an ever-growing, potentially powerful voting demographic to lean a certain way, ideologically.  However, California is a solidly safe state that votes overwhelmingly for the Democrats, so this statewide home loan initiative doesn't make too much sense.

California was one of the first states, in conjunction with a goal of the Democratic party, to give Americans in the lower economic tiers access to homeownership and to build on generational wealth to pass on to their descendants. Those good intentions were the basis for the 2008 financial crisis. It resulted from the aggressive nature of loaning money to people who could not repay their obligations. While I think that is a noble goal with kind-hearted benevolence, the task is troublesome and as the saying goes, "the road to hell is paved with good intentions."  The consequences of an action can be far different from what is hoped for.

It would be interesting to know why this bill was even introduced in the state legislature, but vetoing the measure was an easy call. I don't pretend to know Governor Newsom's intentions, but I suspect one of the reasons may have to do with his presidential political aspirations. This is why most likely he will also veto a measure that was introduced by State Senator Maria Elena Durazo (D-Boyle Heights), which would allow undocumented immigrants to receive unemployment insurance. While citizens of the state are struggling in this economy, providing additional, tangible benefits to non-citizens won't win any support from independents and conservatives if you do want to win higher office. The Republican party would likely hang those signatures around the neck of his presidential aspirations.

The process of getting a home loan requires a dependable income over a necessary period, healthy savings, good credit, valid social security numbers, IRS tax records, and thorough vetting by banks. Many American citizens cannot qualify using that criteria.  So what do Assemblyman Arambula and others who supported and voted for this bill think undocumented individuals have metrics to qualify for the CDA? To own a home, is the "American Dream."  The original Dream for All program was designed to do this.  Expanding the language of the program to include undocumented immigrants for reasons not discussed publicly seems curious.

For the FY2024-25 fiscal year, the Legislative Analysts's Office of California projects a budget deficit of $68 billion (there are varying projection estimates from media publications). While Governor Newsom is trying to close the gap with tax increases and reductions in expenditures for other programs, AB 1840 is unlikely to make any improvement in revenue for local communities and the state.  The population for the updated CDA program is not large enough or financially secure enough to justify the generation of funds to offset deficits too much. 

Private equity companies in the United States are buying smaller, or middle-class homes in large numbers.  One of them, Blackstone, uses a subsidiary (Invitation Homes) to buy reasonably affordable homes with the intent of providing rentals to potentially deserving, aspiring homeowners, or young, married professionals buying in cities where jobs are plentiful such as Atlanta, Charlotte, and Phoenix. When large numbers of people move to those regions, having to rent initially before purchasing a home, is where these companies make their money from these home investments.  

Something similar could be happening in California.  It is the state with the largest number of undocumented immigrants in the country. AB 1840 could use the same principle that Invitation Homes does when buying those "middle-class" homes.  It will allow more people to access home ownership, which (it is hoped), would give the state legislature additional funds to pay off debt and move money to other areas. The CHFA would receive money once a home is paid off or sold, and redistribute that money back to the program (in theory) but this takes time, and with it comes uncertainty and opportunity for defaults and losses. Local cities would have revenue from property taxes to improve those communities.  This concept of undocumented immigrants having an easier method to buy a home than hard-working American citizens, and legal immigrants, who follow the rules seems unfair though.

The most likely reason that AB 1840 was introduced and passed in the California legislature was primarily financial, in that counties throughout the state see this as a way to generate revenue from property tax, regardless of who buys the home, or how it was financed. Additionally, owning a home creates demand for surrounding businesses to help maintain that home (HVAC, plumbing, gardening, general contracting), which in turn generates sales and income taxes for supply chain items and increased staffing for those businesses on a micro level.  The larger question is whether these individuals are capable of financially sustaining this model.

This measure needs in-depth investigation so that the real intent and agenda of this bill can be brought into the public sphere for the sake of transparency. The activists and supporters of AB 1840 will probably fight to have this bill re-introduced with either a different governor or a more supportive Democratic president in the future. What better time than now, to find out why this needed to be introduced and came within a whisker of being law. 

 

What Role Do Think Tanks Play in Formulating American Policy?

 

August 13, 2024

If Americans pay attention to current events, and politics, or even read online publications, at some point they will hear or read about "Think Tanks," which sounds like a prestigious term. Think tanks began as organizations that perform research and are advocates on various subject matters, including social policy, political movements, economics, and military strategy. Most think tanks are non-governmental organizations, but a few are tied to government agencies, some created by defense contractors, multi-billion-dollar corporations, and military entities such as the military-industrial complex companies (Lockheed-Martin, Raytheon, etc.) and the Department of Defense. What role do these think tanks play in American domestic and foreign policy, and is it good for the country in terms of how we formulate policies that are best for the country's direction?

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Think tanks have been around for decades, with experts in various fields, either in a residency program or working full-time, until "friends" in a new presidential administration recruit them to serve in senior positions. These organizations focus on research regardless of whether the government requires it, or a university initiates the request to use resources from fundraising donations. Additionally, they may not be at the mercy of political winds unless their donors have specific ideological perspectives.  Their empirical data collection and findings are used by legislators and government administrators as the basis for laws and public policies. Some good things come out of the think tank world, but other factors contribute to more federal policies that are enacted.  

Think tanks became more partisan, due in part to an ever-divisive political discourse; as such there are both influential liberal ones (Roosevelt Institute, Center for American Progress) and others, as well as conservative think tanks. Certain specific organizations cater to the worldviews of their wealthy donors (such as the CATO Institute, with libertarian Charles Koch as a co-founder, Saban Center for Middle East Policy at the Brookings Institute, funded in part by Israeli-American businessman Haim Saban) and ideological (such as John Birch Society, Federalist Society), and those that skew center-right (Hoover Institute).

Over the last 30 years or so, think tanks have been used more often to help determine legislative initiatives (both domestic and foreign policies) and they have become invaluable for both major parties for administration staffing, and policy ideas.  Additionally, they have been used for Supreme Court recommendations, judges on the federal bench including appellate openings, by different administrations, executive staffing within federal agencies, and suggested policy directives.

There are think tanks that have considerable endowments, along with individuals with expertise that have seen their influence increase and sway members of Congress in both parties.  However, this blog will focus on organizations such as the Heritage Foundation, the John Birch Society, and the Federalist Society.

Heritage Foundation (HF)

This conservative think tank was created in 1973, which included some seed money from wealthy beer magnate Joseph Coors, and was also led by co-founders Paul Weyrich and Edwin Feulner.  It is one of the most well-known think tanks, whose headquarters are in Washington, D.C, and its influence is considerable. I believe many planks within the Republican party platform have been incubated in the halls of this think tank, and their fingerprints are on many legislative bills passed by Republicans in Congress.  The organization created a subsidiary to influence conservative members of Congress called "Heritage Action," which focuses on opposition to ideas such as climate change and Critical Race Theory (CRT), to name a few.

The foundation gained influence beginning in 1981, during the transition by the newly elected Ronald Reagan, which published a set of books called "Mandate for Leadership," which was a directive for dismantling the overbearing administrative state.  The proponents who initiated it were given prominent positions by the Reagan Administration to ensure the implementation of many of the books' proposals.

During the 8 years of Reagan's presidency, many of the ideas that became synonymous with his time in the nation's capital were fermented at the foundation, which includes the "Reagan Doctrine," where the United States provided economic, military, and other forms of support for governments around the world fighting communist movements (Angola, Nicaragua and Afghanistan) and the use of an integrated satellite network to combat a Soviet ballistic missile threat, known as the Strategic Defense Initiative (SDI), commonly known as "Star Wars."

A new proposal that has gathered consciousness around the country (but most certainly with the media) is called "Project 2025" and includes initiatives to give the President expanded and specifically, central control over the expansive government.  The goal is to give the chief executive more encompassing powers, such as treating all federal employees as political appointees, who can be easily fired at will. It is part of the conservatives' desire to make the chief executive fall under the "unitary executive theory," where the President of the United States has immense influence and power to reshape the government (both policy-wise and personnel-wise) under their own image. Some of these ideas include partisan control of the Department of Justice, Federal Bureau of Investigation (FBI), Federal Trade Commission (FTC), and Department of Homeland Security (DHS), to name a few. In addition, reductions in environmental and climate regulations are in favor of fossil fuel production and refinement.  Former President Trump has read it but has stated publicly (while campaigning anyway) that he does not plan to enact the publication's agenda as his own. It remains to be seen if he is being honest.

John Birch Society (JBS)

This is another well-known conservative think tank headquartered in Grand Chute, Wisconsin, and founded in 1958 by Robert Welch, Jr.  While this organization is familiar to those who follow American politics, it lacks the clout and influence of the other think tanks.  It is viewed by liberals as an ultra-conservative, even fundamentalist society that promotes extreme conservative orthodoxy.  A prominent conservative, the late William F. Buckley, founder of National Review, sought to push this fervent group of conservatives away toward the fringe of national Republican discourse and relevance while he was active in party politics. Their membership includes some of the business class, the suburban middle class, and wealthy Americans.  

The organization's primary goal was to combat communist ideals at home through politics, but lately, it has morphed into a reactionary, conspiratorial political organization. The JBS was fearful of "one world government" organizations and agreements, such as the United Nations (UN), and the North American Free Trade Agreement (NAFTA). Their reasoning was that the U.S. Constitution was devalued and superseded by their agendas. The organization was not in favor of the Federal Reserve System and want it to be audited regularly and eventually dismantled. 

Even though it is not primarily a religious organization, the JBS played a role in the elevation and support of the Moral Majority (Rev. Jerry Falwell) and conservative firebrand Phyllis Schlafly. Some within GOP circles felt that although their influence was thought to have peaked in the late '60s and early '70s, their ideals and beliefs have morphed into the current strain within populist members of the Republican party's base of voters.  However, since the views of JBS are too extreme for even the moderate wing of the GOP and the business community as a whole, they are not as influential as in years past.

Federalist Society (FS)

Outside of the Heritage Foundation, I believe this think tank has the most influence on Republican politics and has seen its efforts rewarded on a national scale. It was founded as a legal organization that promotes conservative and libertarian principles behind legal scholarship.  Chapters were created at law schools around the country to counter perceived liberal bias at those institutions, and to promote ideas that are more aligned with the Constitution. An additional motivation for the founders was to work to promote judicial restraint, rather than the activist advocacy that many conservatives felt jurisprudential law was moving towards. The logo is of James Madison, signer of the Declaration of Independence, and author of The Federalist Papers, and is headquartered in Washington, D.C. Major donors in its infancy include the conservative power brokers at the Scaife Foundation and Koch family foundations.

Ambitious, right-leaning lawyers, wanting federal judgeships, and senior positions within Republican administrations, seek out and are vetted through the Federalist Society. To some, it acts as a sort of "de facto gatekeeper," according to Amanda Hollis-Brusky, legal scholar and constitutional law expert, and Chair of the politics department at Pomona College. 

It is the power broker for law school graduates who seek to bolster and strengthen their ambition within a conservative legal community. Former senior executive Leonard Leo felt that the Society was primarily created to build a community that would protect its core beliefs and be self-sustaining and self-driving. A fact worth mentioning is that it is one of the greatest success stories in terms of a student group that matriculated to a powerful institution in Washington, D.C.'s political scene. Their power and reach are exhibited within the Supreme Court of the United States (SCOTUS), where five of the nine justices are open about their membership, beginning with law school and with the Society. 

Its members and alumni have played significant roles in important cases of legal precedent, contributing a part to rulings (as supporting players, lawyers before the bench, etc.), including before the SCOTUS that conservatives favored.  One, District of Columbia v Heller, SCOTUS ruled that each specific individual, and not the collective right, could keep and bear arms. It supported the Federalist Society's primary goal for fewer regulations, across the board, both for individuals who want to purchase and bear guns on their property, or with proper licensing, on their person in the District of Columbia. The Federalist Society was instrumental in shifting public and court opinion, over many years, to a position that was favored by the organization.

In Citizens United v FEC, the Supreme Court weakened regulations for campaign finance, where the majority opinion favored incorporating the free speech clause of the First Amendment into contributing to political campaigns. Those Justices felt that it was an overreach by the government to restrict or prohibit independent expenditures for communications (or financial contributions) by nonprofit corporations, for-profit entities, labor unions, and other types of associations such as the conservative non-profit called Citizens United. The organization was also very active for years on this subject, focusing on lobbying efforts for members of Congress, working to move the public's perception of this issue, and was ultimately successful in its efforts. Critics felt it tilted the scale for influence to corporations and labor unions, to an even greater level, and removed individuals, unless wealthy, to the fringes of political relevance.

The Way Forward

These three examples provide a glimpse into why think tanks have proliferated over time, and why they no longer just partake in scholarly research, gathering data, and presenting findings but rather have a strong influence on those in Republican leadership.  Many governments around the world along with corporate and military interests have realized how useful it can be to create think tanks, advocacy organizations, and research institutes that provide the impetus for policy.  The benefit that these organizations do in terms of research is that their work continues as long as the term for the funds is pre-established.  With government research, information can be canceled or thrown out depending on when a new party controls Congress or the White House. To avoid this, many of the backers of think tanks and advocacy organizations (one would assume) may feel it is better to contribute to those types of entities, rather than lobby their members of Congress to provide taxpayer funds for special projects or advocacy.

Take for instance think tanks that are associated with or tied to military defense contractors.  What is their primary motive? To provide case studies or data that support an increase or justification for military spending.  Some of the profits from these large, affiliated corporations use some of their profits to invest in their think tanks for research that will support an increase in weapons projects, design, and purchase.  If they get their way, and if they are publicly traded corporations, this will see their stock price go up, leading to more profits.  It is a pretty smart method in my opinion.  Experts who are quoted or given platforms on traditional media arguing for a legislative bill related to defense spending don't necessarily disclose the source of funding for their research. When presented to unsophisticated citizens, it comes across as an independently researched basis for a particular funding initiative.

Due to this successful method, think tanks have proliferated across many industries in numerous countries propositioning for fewer regulations related to banking, finance, or government programs. American think tanks have shown the best way to influence media and legislative bodies to support their positions. These organizations have mastered the art of advocacy and in the future, funding, de-regulation, and policy positions will most likely come from think tanks, and it is the best way to convince the general public, or whatever audience is needed to sway opinion to get their desired outcome.  The American think tank advocacy model is what corporations, media platforms, and politicians will use to win arguments, and most importantly, direct the money flow to the right people and companies.

US Men's Soccer's "Golden Generation" Lays a Golden Egg at the Copa America

 

July 16, 2024

This year's Copa America, South America's regional national team tournament, was to be played for the second time in 8 years in the United States. The International Federation of Football (FIFA) will have a larger presence in this country; it was to be the first of well-known and prestigious tournaments over the next four years that would increase the profile of the sport in the U.S.: Copa America (2024), FIFA Club World Cup (2025), FIFA World Cup (2026) and 2028 Olympics.  The participation of the United States Men's National Team (USMNT) was to be a bellwether for how the team can perform against excellent competition.

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The 2024 Copa America was to be one of the first competitions that hopefully would, in the hearts of soccer fans, bring about an era of soccer that would win over casual fans of the sport.  The inclusion of the USMNT would allow the players to be tested against national teams from South America with impressive pedigrees such as Argentina, Brazil, Uruguay, and Colombia, all of whom produce legendary players who play at the highest level in Europe.  This tournament was to be a good test for the U.S. men, and being put in Group C with two winnable games against Bolivia, and Panama, along with a tough one against Uruguay sure looked that way.  

Group Games

USA v Bolivia

Their first game against Bolivia was pretty solid, with Christian Pulisic, the star talisman for the U.S., scoring the opening goal and Folarin Balogun netting the second insurance goal.  The team had other missed chances to send a strong message and score more goals to pad their goal differential, but a win was a win.  

USA v Panama

Disaster struck in the second game for the U.S., when in the 16th minute, Tim Weah, son of legendary Liberian striker George Weah, was given a straight red card for a retaliatory gesture against a Panama player.  That put the USMNT down a man for the rest of the game, but their fortunes seemed to change when Folarin Balogun scored a pretty goal for the Americans in the 22nd minute, which bounced off the right post and into the net.  This gave the U.S. a much-needed boost of confidence.  Sadly, it lasted for only four minutes before Panama's Cesar Blackman sent an equalizer at the 26th-minute mark, into the American net when U.S. defender Cameron Carter-Vickers was unable to deflect or kick away.  

For the remaining minutes, the USMNT was content to play from the back (as the goalkeeper or backline defenders initiate ball movement forward). This meant playing most of the game in their half of the field until good opportunities were presented for a counter-attack. The USMNT had some good opportunities to score, from Pulisic (shot hit the crossbar), and 2nd-half substitute Ricardo Pepi whose header lacked power and fell into the hands of the Panama goalkeeper.  The fatal go-ahead goal by Jose Fajardo came in the 83rd minute. It looked like replacement goalkeeper Ethan Horvath should have been able to stop it but didn't get the job done. The subsequent red card given to Panama's best player Adalberto Carrassquilla at the 88th-minute mark for a rough tackle put both teams at even strength, but the damage was done and the United States was not able to recover a draw, much less a win.

The United States had to secure three points in their final group game against one of the tournament favorites, Uruguay ("La Celeste").  They were led by a mad scientist type of coach, Marcelo Bielsa.  whom some call "El Loco," based on his all-out approach to pressing in his opponent's half of the field and aggressive fouls against their opponents.  I feel his style is the South American version of the Netherlands' groundbreaking 'Total Football" introduced in the 1970's.

The U.S. was supposed to have taken care of qualifying for the knock-out rounds by beating Panama, but being a man down and giving up a late goal changed the outlook.  It required a tall task of overcoming a tough Uruguay side.

USA v Uruguay

Their final group game started well, with the U.S. mirroring Uruguay's tough pressing and countering.  The USMNT even had some good scoring chances, but were not able to capitalize on any of them.  They went into the half tied 0-0, and were 45 minutes away from qualifying for the next round, with a little help from the Bolivians.  U.S. coach Greg Berhalter was even signaling to his team later on that Bolivia had tied Panama in the second half, so all the USMNT had to do was hold on for dear life and draw Uruguay.  That dream didn't last too long, as Panama netted two insurance goals past the Bolivian goalkeeper.  During this time, a Uruguayan player placed a rebound off of a free-kick from teammate Ronald Aruajo in the 66th minute. Replays looked as though it may be offside, but ultimately video assistant referee ("VAR") let the goal stand. That put to death the American dream of going deep into the Copa America.  It was the worst tournament outcome for the U.S. men in twenty tournaments on home soil.

Where does the USMNT go from here?

The time for recriminations has begun, especially for coach Greg Berhalter, who was never the person many USMNT fans felt was the right coach to begin with.  A lot of questions will be directed toward the USSF as a whole, and its board members, in addition to Greg Berhalter, that will also generate a lot of anger and frustration.  

What ails the men's program?  Many indicators on and off the playing field provide a glimpse as to what is wrong.  Let me lay them out:

• Many countries, through their national teams, possess a certain style of play.  Think Netherlands and "Total Football,"  Brazil and their legendary "Jogo Bonito,"  Italy and its suffocating defensive style, and Spain's "Tiki-Taka".  The USMNT doesn't have a particular style or formation, and it changes with each new manager.  It lacks a coherent philosophy when they play, and it shows.
• The American men have not established a strong culture based on anything in particular.  Whereas the U.S. women, with the help of the Title IX federal law, were able to create a pipeline for talent, coupled with the rest of the world that showed little interest in women's soccer (at that time, not currently) and thus creating an exemplary record of winning FIFA World Cup titles (four) and producing elite players (Mia Hamm, Alex Morgan).  The U.S. men have no comparison with their peers, and that hurts their legacy.
• Youth soccer in America is a notorious pay-to-play format, where families with means have access to good coaches, practice fields, and a network to help promote their child's journey. 
• Leagues around the world have an academy system for individual teams, which is free to those who have talent (regardless of socio-economic background, which is key), and those teams spend considerable time and effort in molding players who can fit their style of play and thrive on the senior team. The top-flight U.S. league, Major League Soccer (MLS) has made some improvements to their academy system, but not enough.
• The USSF can make mistakes in their hiring of coaches for the USMNT; Greg Berhalter has had a mostly unimpressive tenure, especially with the recent failure in the Copa America this month, and many fans were justly calling for his dismissal after the U.S. was eliminated.

For the fortunes of the USMNT to change, some of the above points must be addressed.  A philosophy that men can adopt for their team's character is good but needs more thought.  Perhaps finding a Sporting Director at the U.S. Soccer Federation who will stay in the position for quite some time and work with senior team coaches to develop that philosophical playing style could be one solution.  It is hoped that philosophy will slowly develop a culture that the rest of the world will acknowledge, and should propel the USMNT to better success.  

Additionally, the youth soccer system in this country needs a massive overhaul. Around the world, talented kids are steered to environments where their careers can be nurtured for personal growth and success. Instead, players here dream about getting a college soccer scholarship. That should not be how the men's program should develop talent. I feel American players should begin their pro careers in MLS (that is one route), and then go to Europe's best leagues. Pursuing higher education can be done later.

Do I think these changes are going to happen soon?  I don't have a strong feeling about it.  The powers that be that have influence and control, at the U.S. Soccer Federation, and at MLS, are not interested in reform. They are like protective fiefdoms that aren't on the same page consistently to achieve big things but would rather keep things the status quo. The wrong people (pay-to-play coaches, MLS owners) are making money instead of the right people (the players). That is why I think the trajectory of the USMNT will plateau for the foreseeable future, and nothing will improve on the field.  

I see more failures in international competitions for American men and a lack of regular introspection. A week after the Americans were eliminated, Greg Berhalter was fired by the USSF from his duties as the men's team coach. A coach they chose not to hire, Jesse Marsch (former MLS, and occasional USMNT player), led Canada to the Copa America semifinals, which was for him, an amazing achievement.

The U.S. Soccer Federation has an opportunity to hire a dynamic coach who in turn will assemble a great team for the 2026 FIFA World Cup, and if they achieve success, could win the hearts and minds of the country.  However, the federation must get it right in terms of who it hires.  The coach will have just a short two-year window to sift through the men's talent pool and find the players who can work inside the coach's playing style.  The names being openly discussed include Jurgen Klopp (former Liverpool manager), Herve Renard (former Saudi men's team and current French women's coach), Patrick Viera (former France player and MLS coach), and a few American options, Steve Cherundolo, (current MLS coach at Los Angeles Football Club), B.J. Callaghan (former USMNT assistant and current MLS coach in Nashville). Many of them will turn down the opportunity, but the federation should still have high aspirations.

I believe the USSF will ultimately choose a coach based on metrics that have nothing to do with soccer but with an emphasis on the financial aspects.  The federation wants someone who will be a loyal and obedient "company" man, someone who will pick a large number of MLS players, based on the wishes of MLS Commissioner and USSF Board Member Don Garber.  Additionally, since it is a two-year window leading up to the World Cup, priorities will be on marketing and storylines not really important in the grand scheme of things.

While I hope the federation changes how it operates and picks a coach who will help the USMNT win, I think in the end, nothing will change.  The USSF knows soccer is not the most popular sport in this country, and as such, there is a lack of accountability for the choices senior executives make.  That makes everyone comfortable, and when people are comfortable, there is no pressure to get it right and succeed on the field, where it really matters. 

Will The WNBA Benefit From The "Caitlin Clark Effect?"

 

May 22, 2024

This year's NCAA women's March Madness tournament was the Caitlin Clark coronation story.  She rose to fame last year in the same tournament when her skills took the University of Iowa Hawkeyes to the final, where they lost to Louisiana State University (LSU).  That game had a seminal sporting event's trappings: two good teams, stars, and memorable moments. A notable one showed LSU star Angel Reese waiving her hand mockingly in front of Iowa's Caitlin Clark's face during Hawkeye's loss.  The spotlight shined bright on her this past college basketball season.  Can she elevate the Women's National Basketball Association (WNBA), which has never captured the nation's interest in its history, to new heights? 

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The lasting effect of last year's title game was that Caitlin Clark would have much more media pressure around her during her final college season in 2024.  As such, the hype train for her was through the roof, and she delivered by scoring baskets from long range that got the attention of ESPN's Sportscenter regularly.  Her popularity was greater than many men's college basketball players, and the ratings for this year's women's championship were higher than the men's title game.  

The hype train left the station last year and has been cruising since at a frenetic pace.  Once the women's tournament started this year, it was "all Caitlin, all the time."  Her performances throughout the tournament brought many people to her games and increased viewership on television.  She and the Hawkeye women returned to the title game again in 2024, but this time they lost to a very talented University of South Carolina Gamecocks team, led by former college and WNBA legend Dawn Staley.

Analysts at ESPN and other sports media were heralding a new era in women's basketball, and specifically, the WNBA.  Since its inception, the league has not been very popular, drawing sparse crowds and even lesser interest when the games were televised on ESPN and ABC.  Despite having great players over the years, none had been able to capture the nation's interest amongst basketball fans, including those of the National Basketball Association (NBA). Casual sports fans were an even harder group to show interest in, and some in the media stated the WNBA existed solely on the benevolence and financial support from the NBA.  To a large extent, that was true.  However, over the past few years, many corporations have provided much-needed sponsorship money, which has helped generate revenue for the women's league. I do feel that support was generally due to corporate alignment and financial benevolence with social justice movements after the death of George Floyd, and the WNBA benefited from that largesse. However it came to be, that financial help has seen the league increase its revenue, which is a good thing.

Ms. Clark's arrival on the scene the past two years has brought in sports fans to watch women's basketball, something that was a welcome sign for fans of the game.  College basketball, even for the women, had healthy crowds and good fan support, although college sports attendances in smaller towns without professional teams generally were good for all university-affiliated teams. 

For many years the players of the WNBA played in below-capacity arenas (including the cavernous homes of the NBA franchises).  Some teams had to finally move their games to smaller capacity arenas to give their teams some semblance of a 'home court advantage.' 

The intense media coverage of Ms. Clark's college games over the past two years, including those of the NCAA tournament, saw television audiences increase by the millions when the Iowa Hawkeye games were shown.  This year, the NCAA women's final drew over 18.9 million viewers, more than 500,000 more than the men's final.  That had never happened before and gave hope to those whose fervent support of the ladies could be sustained for the long term.  Additionally, the recent WNBA draft had over 2 million viewers, which was also a record. One could ask, is this the "Caitlin Cark effect", or does the WNBA have genuine momentum?

While fans of the women's game promote the idea that once people have "seen" their performances, attendance and viewership would go up, I feel otherwise.  Men and women are built differently; men have more muscle mass, in addition to a higher center of gravity that allows them to jump higher (dunking comes to mind), while proponents of the ladies' game said the WBA plays the game the way it is supposed to, with an emphasis on fundamentals (passing and ball movement).

Overall, the NBA is still more popular (at least over the last 40 years) and even though social justice causes have turned off some fans in the past few years, the product tends to be better than the WNBA overall. Major networks are still willing to spend considerable money to carry NBA games. Despite this, Caitlin Clark could change the league's fortunes for the better.  Already, due to pressure from media circles after Ms. Clark was seen wandering through an airport with minimal security, the WNBA has decided to use charter flights for the remainder of the FY24 season.  Despite WNBA players in the past advocating for these flights, the league avoided mandating them because of their cost, and many teams in the league have owners for whom those costs would be prohibitive for their balance sheets.  I believe the WNBA Commissioner, Cathey Englebert, changed course because she felt with the new scrutiny, and companies wanting to be associated with Ms. Clark and the league,  the potential revenue increase, along with a better media rights deal within the next year or so, the cost of chartering would be recouped.

Time will tell if Caitlin Clark can put the WNBA on her back and take it to new and profitable heights. The lack of interest and popularity was never really about sexism and misogyny as feminists and women's sports advocates claim. If you run a business, and you want the general public to care about your product, you have to give people a reason to care.  That is the job of the players and the league, not the average fan.  There has to be an interest or focus on a player (or several for that matter) for fans to spend their hard-earned money going to games or devoting time to watching their product on television. That is where the WNBA fails.  I assume the WNBA league office believes since it is a women's professional basketball league, it should generate the same revenue, interest, and fan support as the NBA, simply because they do the same thing.  That is absolute nonsense, and is extremely arrogant, with a large dose of entitlement to boot.

The WNBA product requires a lot of improvement, and should not be compared with the NBA, ever. They are totally different games for a reason (as mentioned above) and fans of the women's league must focus on different marketing strategies.  With Clark, the league was gifted a once-in-a-lifetime talent, who consistently delivered in competitive collegiate environments.  Fans of the WNBA will hope she can do the same in a professional environment, but the burden cannot solely be on her, which would be unfair.  The league needs to find and promote colorful personalities, healthy conflict, and dramatic rivalries, much as Larry Bird and Magic Johnson's 'Boston Celtics vs. Los Angeles Lakers' battles did for the birth of the modern NBA in the 1980s. This momentum in turn led to its evolution and zenith with Michael Jordan's Chicago Bulls in the 1990s. Will Caitlin Clark be the WNBA's Jordan? No, but she doesn't need to be.  What she must do, is usher a modern birth of the league, a catalyst that helps the league sustain progress to one day have a healthy business where the players get paid their market value, and fans continue to show up and spend their money.  

If she can do that, that is a great legacy to leave to future players in the WNBA.

 

Is Solving Homelessness California's New "Goldrush?"

 

April 29, 2024

Homelessness has always been prevalent in America, since its creation.  However, over the last twenty years, Americans have seen an increase in those who live on the streets, which has become a serious problem. It has become a campaign issue for Congress members and those running for President of the United States.  The recent reaction has been for cities and certain states to provide large amounts of taxpayer money to "solve" the problem, but it has created a new "Gold Rush" in California.  Will government funds solve this crisis?

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Non-governmental organizations (NGOs) and non-profits have made a mad dash to their local city councilmembers and California legislators with their hats out for tax funds to alleviate cities of their homeless problem.  Residents of cities and the state government have noticed an alarming trend of homeless people in their neighborhoods, on public transit, and within trendy locales, which has seen spikes in alcohol-related arrests by police and releasing of bodily waste in public near restaurants, luxury residences, and places of work.  It has generated anger and exasperation among residents, especially in large cities, and has become a campaign issue for many politicians. In some cases, the reaction has been to provide taxpayer funds to combat it. 

One of the catalysts was President Reagan's initiative in the early days of his administration, with the help of Congress, to effectively end any funding of the Mental Health Systems Act (MHSA-1980), a program created by his predecessor, Jimmy Carter. That bill was part of a movement from the 1970s to rehabilitate people who suffer from mental illness, whereby the federal government provided grants to community mental health centers, part of a comprehensive desire to coordinate mental healthcare, and social support services.  The essential repeal of the MHSA was done with the tacit agreement by a Democratic-controlled House of Representatives and a Republican-controlled United States Senate, included in the Omnibus Budget Reconciliation Act of 1981.

This endeavor pushed a vulnerable population who required strong advocacy and care out of medical institutions and onto the street. They had to find local organizations, or state programs, to help them if available. Since then, states and local municipalities have had difficulty dealing with a population that seems to increase. In addition to mental health issues, the other root causes are a lack of housing and financial hardship, alcohol and drug abuse, and these life challenges have affected people in California the most. The National Institutes of Health states that between 30%-40% of homelessness is related to alcohol abuse, while 10%-15% are from drug addiction and dependency, and points out that having alcohol and drug-free housing is essential to recovery.

Many American cities have sizable homeless populations, but according to CBS News, New York and Los Angeles have about 40% of the country's destitute and homeless. Recently elected Los Angeles Mayor Karen Bass promised to find housing for many of her city's homeless population, which was a major theme of her campaign, one on which it seems she wants to deliver.  According to local news sources, that program, called "Inside Safe," initially removed 2,000 people off the streets and, along with current and new programs, relocated 22,000 people into temporary housing, an increase of 5,000 from the previous year.

Mayor Bass's initiatives follow a 2016 countywide measure (Prop HHH) that earmarked $1.2 billion to build 10,000 apartments for the homeless within a decade, which passed with popular support. There was hope that this would transfer many homeless persons into those apartments. KCRW provided a report authored by Anna Scott and Saul Gonzalez, on what has happened so far at the five-year mark. While the proposition had good intentions and has generated a large amount of taxpayer funds, it has not achieved the primary goal of building affordable housing for the homeless in the city yet.  

Developers within Los Angeles have immense power through their lobbying of the mayor and city council.  Additionally, to build projects, these companies have to solicit funds through banks and government loans, using financial commitments from those entities as leverage for additional funding. After several rounds of submission and approval, Scott and Gonzalez note the process requires a lot of money and can be exhausting.  Apparently, this is where most of the $1.2 billion has gone toward. Prop HHH was intended to make it more efficient to eliminate the red tape and wasting of funds, but the "administrative blob" was too entrenched.  They also state that some things were also out of the city's control, which exacerbated the problems.  These include changes to the corporate tax rate, reduced under the Trump Administration, which diminished the need for write-offs and tax credits, which was a major source of affordable housing funding. Private companies and entities buy those credits in exchange for cash for the developers. At the time of the article, only 1,000 of the proposed 10,000 units were built, while most of the money had already been committed or pledged. The KCRW article paints a good picture of the overlapping issues relating to homelessness, good intentions, and government red tape.  

Over time, the state of California has introduced statewide ballot measures during election years to provide proposed solutions, albeit at taxpayer expense. A lot of money gets allocated via a legislative general fund and then distributed amongst the NGOs and non-profit entities, but the problem is widely visible and persists.

In California this year, the Associated Press (AP) stated during the March Primary, this latest proposal, Proposition 1 passed with a razor-thin success rate because residents of the state have paid for homeless measures before, but nothing seemed to have changed. Voters knew that Governor Newsom invested billions of dollars to deal with homeless populations within the state's cities, but there has been no visible improvement. The language in the proposition focused on creating new mental health treatment, finding more housing, and rehabilitating those within the temporary housing system into productive members of their communities.

Homelessness is a serious challenge for large cities in the 21st century.  The seeds for the issue (mental health struggles, financial hardship, loss of family, substance addictions) are watered by benevolent intentions from concerned citizens without any results-driven metric. The funds generated through taxation are then used for issues not related to actually combating the problem.  While those who are homeless persist, the elected officials, activists, and NGOs dealing with the problem come up with new and "better" reasons for funding, but the problem remains unchanged.  

Conservative cable news pundits claim that the reason California has a large homeless population is that individuals arrive from other states, and it is primarily due to generous benefits.  However, an article in The Atlantic presented an empirical study with data that shows most of the state's homeless are residents who have lost homes due to financial hardship in the same county where they are living on the street, a surprising finding. What can be done? It would be good to ensure most state residents have immediate options available to them to avoid going the shelter route and reduce the influx of people without help.

If these proposed programs can avoid the same red tape that other county initiatives encounter, then money will be used for its intended goal.  A good step in that direction was the recent news that the homeless programs within the city of Los Angeles will be audited by an outside firm, approved by the Los Angeles City Council.  How the funds are being used by collecting and reviewing service providers' metadata can bring forth better solutions. For instance, the audit needs to determine the varying types of reasons people fall into homelessness within the city and provide a breakdown according to:

• percentage with a substance addiction
• percentage with mental illness or combined with addiction
• percentage coping with financial hardship

In the current economic climate, it would not take much for the average American to lose their housing and fall into homelessness, and we should be aware that it can happen to anyone at any given moment. Having empathy for those who struggle is good, but it should not be taken advantage of by elected officials and those who want to make a profit from those good intentions.

I believe that those homeless who are housed under city initiatives must be grouped together based on similar situations. Once data has been collected, it would be smart for city agencies to separate those who need rehabilitation and healthcare, and those who need shelter until they are financially independent again. It would be a challenge for those who are living on the streets because of bankruptcy, and who must share housing with those who suffer from mental illness or drug addiction and require rules-based, case-managed administration.  It will pose obstacles of compatibility to those individuals or even families facing different challenges who are forced to live together in a building or in similar settings.

I wonder whether "solving" homelessness is like the military-industrial complex's business model, in that funds are needed to combat dictators and authoritarians who threaten America and to protect the country. Regardless of the validity of these threats, money still transfers out of the government treasury regularly and into the willing hands of the defense contractors who build more weapons and hardware than what is requested. It is funny how these threats never go away, but neither does the money flow.  Either the problem is meant to persist, but never solved, or the underlying administrative hurdles are too entrenched to mitigate. There is too much money to be made by those who have skin in the game keeping the problem around, and there are many voters who are willing to keep the "Goldrush" open for business.

I would be happy if I was proven wrong, however. Hopefully, voters will see in their neighborhoods the good-intentioned proposals actually rehabilitate those with mental health struggles, addictions, and financial distress and provide shelter for those who actually need it, and deliberately and purposefully eradicate this problem.

The State of the GOP Primary So Far

 

January 10, 2024

After four debates between the Grand Old Party (GOP) aspirants for the party's nomination, it is still former President Trump's to lose, and barring any legal problems, or convictions for that matter, none of the candidates have proven their worth to be a better alternative for Republicans.

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For those who dislike former President Donald Trump, or had hoped to see a bloodbath in terms of the prospective alternatives to the "Orange One" fighting it out for the nomination, it has not turned out that way.  At various times, a new candidate would become the trendy "it" person.  First, Florida Governor Ron DeSantis was favored to be the best person to wrestle the nomination away from Mr. Trump, but his campaign has faltered and has not recovered. Then, political momentum moved to Vivek Ramaswamy, who was intelligent and well-read, but his confident demeanor rubbed some the wrong way. After his stumbles, the media shifted toward former South Carolina governor Nikki Haley.  Former New Jersey governor Chris Christie was a known name, and I agree with some that he may have missed his best chance for the nomination in 2012 (he did not run, and supported Mitt Romney's failed campaign). No one had been good enough to break out and pull away from the candidates who weren't serious contenders.

According to FiveThirtyEight, in January 2024, Donald Trump polls at 61%, while Mr. DeSantis has 12% support, and the surging Nikki Haley is nipping at his heels (pun intended!), while Vivek Ramaswamy has not moved past 5% and Mr. Christie brings up the caboose at 3.8%.

Governor Ron DeSantis was pegged by many political pundits and media publications as the greatest threat to wresting the GOP nomination from Donald Trump and restoring centrism back into the Republican party.  Things have not gone as planned.  His campaign was greeted with optimism, but his rollout on Twitter, now "X," was marred by glitches and technical issues. It was the equivalent of a sprinter tripping and falling after the gun was fired. It was not a good look for his campaign.  During the first four debates, Mr. DeSantis did not distinguish himself and came across as stiff, clumsy, and had facial expressions that were awkward or ill-timed.  To me, he didn't appear at ease, or comfortable with his environment and didn't exude confidence during challenges from the debate moderators. His campaign has been an overwhelming disappointment to party observers, and he probably will end his campaign if he doesn't perform well in the early primary states.  It would be a surprising ending to what his campaign had going for it at the very beginning, inevitability to being the best challenger to Trump's reign, and becoming the new leader of the party once he won the nomination.

Nikki Haley was not someone the country thought would be a contender early on, but she has taken part of the Republican party's base by storm.  As the former governor of South Carolina, she, like Mr. DeSantis and Mr. Christie had successful terms as the chief executive of their respective states.  All have proven track records, but she was also former President Trump's United Nations (U.N.) Ambassador.  During debates, she extolls her experience dealing with enemies and antagonists for America at the Security Council.  What she doesn't want to admit, and no one has asked her, is that she must vote the way the State Department wants her to vote, and works at the pleasure of the President of the United States.  In other words, she doesn't make up her own positions and is unconstrained by the President's directives.  There is no room for independence, and she should be clear about her prior role, and the other primary candidates need to point that out during debates.  Additionally, during a campaign stop, she was asked about the Civil War but neglected to mention slavery as the primary cause of the conflict. It made her look foolish and dampened any momentum after a solid performance during the most recent debate. After leaving her ambassadorship, she sought the greener pastures of private enterprise and was given board seats for several defense contractors and other large corporations.  

I believe that a good number of those defense contractor employees have written maximum contributions for her campaign and several GOP mega-donors have thrown their support too. Ms. Haley is the preferred candidate for the military-industrial complex, and her positions concerning Ukraine, Israel, China, and Russia show who "butters her bread."  Those positions go against what many in the Republican Party want, which is "America First," which is to avoid costly wars or support for countries whose goals and agenda are different from what the United States should be. 

I feel Vivek Ramaswamy is an intelligent and assertive candidate, and is unabashed in providing his opinions and policy positions. He generally doesn't cower from any challenges from other candidates, or political journalists, but I think his momentum has probably peaked.  The mainstream media initially gave him a lot of air-time, which he took advantage of, and went on as many TV interviews as possible, but now have turned on him.  Several women on these networks promote the idea that he has a "women problem," in that he has criticized prominent women in the party (Ms. Haley, and Republican National Committee Chair Ronna McDaniel) for example.  I disagree with that assertion. Mr. Ramaswamy has fought onstage with Mr. Christie, Mr. DeSantis, and a few other men running for the nomination. He seems to direct his ire onto anyone he feels deserves it, but that has not allowed him to win over more skeptical voters in the primary states of Iowa and New Hampshire. The "Establishment" of Washington, D.C., which is all about the elites (including donors) of both parties who have the same foreign and monetary policy, Wall Street, and political agendas, have not increased their fundraising and public support.  If Vivek cannot win or place second in the first three primary contests, I think his candidacy is effectively done and he should bow out gracefully.

I had always felt that Governor Christie should do himself a favor and drop out of the race. Looks like he took my advice, and has officially dropped out as of today, January 10th.  His campaign didn't seem to gain any traction, nor did he seem to be able to encroach on other candidates' momentum.  It was an afterthought, and voters seemed to agree.

This is for all intents and purposes, former President Donald Trump's race to lose.  It always was. He has such overwhelming support from his party's base and specific members of Congress.  Along with independents, his campaign has seen that support grow after Mr. Trump's legal troubles and indictments.  I think the media wanted a genuine horse race and didn't want the Republican primary to be a pre-ordained coronation, so they played the candidates, and their supporters off each other, in hopes of drawing in viewers and potentially seeing their ratings rise. The shadow of Mr. Trump is so large that the other candidates, over time, would never be able to outrun his popularity.  It is the reason why Donald Trump has avoided the debate stage so far because he knows that shadow will do its job, and not allow any sunlight to improve the chances of the others trying to unseat his rule at the top of the party.

If he does lose his legal challenges or gets convicted, then I think the party's voters will choose someone else without too much controversy.  Governors Christie and DeSantis don't seem to draw in large numbers of support, but they do have leadership experience; however, they lack a lot of donor support, especially from the billionaire class to give them campaign momentum.  

Who does have some momentum? Governor Haley of course.  The backing of megadonors such as LinkedIn co-founder Reid Hoffman, JP MorganChase CEO Jamie Dimon, the late Charles Koch's political action committee, Americans for Prosperity Action, Citadel hedge fund founder Ken Griffin, and Home Depot co-founder Ken Langone all have thrown their backing to her candidacy.  Will that push her past the others mentioned in this piece to give her a shot at winning the nomination from Donald Trump?  I am not sure.  While the political establishment supports her, the party's base may not.  For it is they who provide their sons and daughters for endless wars and will see their jobs and wages disappear.  For them, Trump is their champion.

If the media wanted chaos and a real horserace to improve their ratings, wait until Mr. Trump cannot win the nomination because he could be incarcerated appealing any conviction.  Then the GOP primary and general election against President Biden will be off the rails.  Hold on, everybody!

The College Football Playoff Has Messed Up Again.

 

December 11, 2023

The end of this 2023 college football season, where a champion is crowned during the four-game "College Football Playoff (CFP)," was supposed to generate fan interest and drive TV ratings. However, a wrench was thrown into the process after the Florida State Seminoles, who went undefeated (13-0) and won their conference championship for the Atlantic Coast Conference (ACC), were not one of the four teams that qualified for the playoff: Michigan, Washington, Texas, and Alabama.  It has caused somewhat of an uproar amongst Seminole fans, and a certain segment of overall college football fans, potentially ruining a slew of anticipated matchups among the four chosen teams.

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College football for many years was a simple process, in that schools played the teams in their conference, along with three out-of-conference games. At the end of the season, sports columnists from around the country would determine which teams were "national champions." This was done primarily through a ranking of teams in the Associated Press (AP) Top 25, along with a United Press International (UPI) Coaches Poll, which was voted by active Division 1 coaches.  These rankings were highly subjective in my opinion. In a few cases, teams that were crowned national champions had in some cases lost to teams ranked lower than them but were judged on the season, instead of head-to-head matchups (USC and Alabama in 1978 shared that title: the AP chose Alabama, and the UPI Coaches Poll selected USC). Additionally, fans of the game were upset that in 1984 Brigham Young University (BYU), which played in the less prestigious Western Athletic Conference (WAC) was crowned national champion that year.  Observers felt their schedule was not competitive and did not have a signature win to justify their title. 

There were other split champions spread out over the years, so the major conferences got together and created the Bowl Championship Series (BCS) which was another progressive attempt by conferences to unify the champion of college football between 1998 and 2013.  Previous endeavors included the Bowl Alliance and Bowl Coalition.  The four major bowls that were, over time, to be the bowls that rotated semifinal games were the Rose, Fiesta, Sugar Bowl, and Orange Bowls. The bowl games that were not selected as semifinal hosts were given teams that were ranked within a certain bracket.

A quirk in the selection of title game participants was the use of a computer algorithm, which was not transparent in its methodology and proprietary to the creators of those models.  Like Florida State this year, in previous years Southern California (USC) in 2003 and Auburn University in 2004 were left out which resulted in anger and consternation amongst fans of the sport and the respective universities.  Tweaks were implemented in the following years to correct an evolving model to select two worthy teams to play for the national title.

The sport, despite all the corrections and tweaks, is still really a subjective beauty pageant.  Rankings for teams are selected based on the aggregate opinions of sports writers, whom I am sure get "suggestions" and are encouraged to rank certain teams higher than their merit.  Some of this is probably done by conference executives to grease the wheels for their teams. I am not a fan of this process.  

You would need to have a simple, easy-to-follow format so that teams and their players know what is needed to make the playoffs more legitimate and free from any manipulation from television partners, conference commissioners, and other interested parties. The system must be immune to pressure from outside forces.

This is what I propose (which might have saved the Pacific 12 Conference (PAC-12), which recently imploded with the defections of USC, UCLA, Washington, and Oregon over the past two years):

The PAC-12 was part of a group of conferences known as the "Power 5," which comprised the PAC-12, the Big-10, the Southeastern Conference (SEC), the ACC, and the Big-12. These conferences controlled the dialogue regarding bowl games and national championships, with minimal influence from the National Collegiate Athletic Administration (NCAA), and set the agenda for the sport.  This group also includes the University of Notre Dame because they are a wealthy and influential independent brand name (in 2013 Notre Dame agreed to partially join the ACC, with an agreement to play at least 5 ACC schools every year). 

The playoff format I think would work best is an eight-team format.  Each conference champion gets an automatic berth, along with three at-large teams from any conference or independent Notre Dame. The at-large teams would be based on non-conference victories that must be ranked in the Top 15 with an impressive strength of schedule (to be determined by a CFP committee, and metrics must include road wins against Top 10 teams, along with schedules that include strong non-conference games, which are chosen by the school years in advance).

Once all eight teams have been selected, they are seeded based on the overall strength of the schedule.  This means just because you are a conference champion, you do not get a home game in the first round of the playoffs. An at-large team with a better non-conference and Top 10 road wins should get a home game.  This rewards schools that schedule tougher opponents.  

There would be three rounds to determine a champion.  In round 1, all eight teams play.  In the next round, the remaining four teams would be re-seeded by the committee and the two semifinal games are played between the rotating group of four major bowls (Rose, Fiesta, Sugar, and Orange).  The final round would be played in one of the two remaining "Big Four" bowls.

This format shares some similarities with the format being used now, notably the shared hosting duties for the semifinals of the "Big Four" bowl games.  The main difference is that you are protecting and rewarding winning your conference, but not providing a sense of entitlement that a conference winner will get a home game in the first round of the playoffs.

I think this format would be a better option than the current CFP model the sport is using now.  My proposal protects winning your conference, while not shutting the door on great teams that are not able to play for their respective conferences.  I think my idea has merit, and the powers that be should use it, instead of the 12-team playoff that will come into effect next year (that's too many teams!).

I welcome any feedback and am open to a better proposal for how college football can crown a true national champion in the future.

Renegade Republicans Remove a Sitting Speaker

 

November 10, 2023

On October 3rd of this year, for the first time in its history, the United States Congress removed a sitting Speaker of the House through a special vote.  Kevin McCarthy (R-CA) was removed through a simple motion by a member of his own Republican party, led by Matt Gaetz (R-FL).  It was a shock to the current Congress since it has never been done before in the history of the United States House of Representatives. Was this move by a specific group of Republicans a smart move, or has it damaged the GOP agenda in the House?

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Before Kevin McCarthy assumed his duties as the newly elected Speaker of the House on November 22, 2023, he had to survive several "No" votes that were humiliating to his candidacy before getting the required number of votes to win the top position in the House.  The negotiations between his party's more aggressive populists included a concession by Mr. McCarthy to allow any member of the GOP Caucus to bring forth a no-confidence snap vote at any time.  

So, on October 3rd, Matt Gaetz brought forth the motion to declare that the Speaker position was "vacant," which required Mr. McCarthy to counter his motion with a vote for his support, and to everyone's shock surprise, Mr. Gaetz was able to remove a Speaker of the House.  Of course, the Democrats played their gleeful part as well, voting with eight Republicans to vote against Mr. McCarthy.  

The rogue Republican members of Congress were upset at the negotiations involved in raising the debt ceiling, amongst other issues at the root of their displeasure with Kevin McCarthy. Mr. Gaetz, Nancy Mace (R-SC), Tim Burchett (R-TN), Eli Craine (R-AZ), and Andy Biggs (R-AZ) were among those members who got their wish and removed a sitting House Speaker. Moderate Democrats and Republicans didn't think the vote was warranted, since working across the aisle to keep the government operating was a common goal, despite serious political and policy differences between the parties.

After the shock vote that passed, several Republicans stepped forward to try and win support from the members of their caucus. First, it was conservative Steve Scalise (R-LA), who was memorably shot during practice for the annual baseball game between Republicans and Democrats. Although he was popular and well-liked, he was not able to draw the required support to win after multiple vote tallies.  Next, it was the former gym teacher and "The Jackletless One," Jim Jordan (R-OH).  He failed several rounds of voting.  Finally, after a week or so, a fellow Louisianan of Mr. Scalise, Mike Johnson (R-LA), won the support of the GOP caucus and was able to secure the votes needed when the full House voted. Democrats immediately attacked his deeply religious views and attempted to paint him as a religious fanatic who does not share congressional Democrats or their voters' priorities in matters such as abortion, immigration, and economic policy.

So what was the endgame here for Matt Gaetz and his faction within the GOP caucus? One of the most important elections in the country's history is a year away, and his actions have brought about instability within their party.  If you are a Republican, control of the lower chamber of Congress is vital to their party's agenda and goals.  Removing a Republican Speaker who appeared to be a moderate, but was the party's best fundraiser does not appear to be a savvy political calculation.  That is generally one of the primary reasons a member is able to become Speaker of the House, due to their ability to raise large amounts of money, which is then distributed to the campaign war chests of those running for re-election.  In the House especially, where members seek re-election every two years, money is extremely important.  Speaker Emeritus Nancy Pelosi was the leader of the Democrats in the House, and her position before as Minority Leader was due to her excellent relationship with wealthy donors and corporate America.  In fact, that is the single most important skill in having a leadership position in either the House or the Senate.

Removing one of your party's prolific fundraisers is a serious tactical error so close to a vital national election across multiple levels of government that I am at a loss for its motivation.  I get that Matt Gaetz and his group of renegade members had intense problems with the lack of fiscal responsibility during the debt ceiling negotiations, not to mention other issues, such as financial support for Israel and Ukraine. Their displeasure will have serious costs politically. Personally, I don't think this was well thought out on their part.  I am aware of the various groups with Congress, dispersed amongst both parties, that do not march in lockstep with party leadership.  However, those on the Democratic side, such as "The Squad," led by Alexandria Ocasio-Cortez, have been muted in their ability to cause problems for Nancy Pelosi in the past and the current party leadership.  The Republicans on the other hand, since they are the party out of power in the White House, cannot control or work effectively with their own members that have their own separate agenda.

I think that Mr. Gaetz's political machinations could cost Republicans in the 2024 elections.  With President Biden and Vice President Harris both polling badly, the economy not working for the majority of Americans, especially the lower middle class, along with chaos and conflict in Europe and the Middle East, it was a good opportunity to raise vital fundraising dollars to mount serious challenges to the down-ballot campaigns during their party's presidential nominating process.  Having stability within your party's leadership in the House is a necessary foundation to win back control of the Senate and White House.  This miscalculation by the eight members of the GOP who forced a vote on their own Speaker because of ideological purity will backfire I am afraid. 

The new Republican Speaker has not proven himself to be adept at withstanding political fights launched by the Democrats and shepherding his own party to hold the line for issues important to their donors and voters. If the GOP wants to challenge President Biden's agenda, they must hold onto the lower chamber, at least, while hoping to have party turnout so they can attempt to win back the Senate.  

Matt Gaetz's aggressive political maneuver may have won him the adoration of Republicans who share his political ideology, and his fellow renegades in the House, but in the end, I think this might have been a Pyrrhic Victory.  His aggressive action may have won him short-term success, but will ultimately doom the party when it had a good chance (and was within striking distance), to make gains in the Senate, and possibly the White House, for a banner year for the GOP in 2024. However, actions have consequences, and Mr. Gaetz's actions may have fatal consequences for his party's immediate future.

Will The Fight Between ESPN And Disney Change Cable TV forever?

 

October 6, 2023

Recently, before the start of the college football game between the Utah Utes and the Florida Gators, on August 31st, Spectrum, the giant cable company, cut the feed to ESPN, the channel for the game that was to be televised. Initially, I was under the impression that it was a satellite glitch that would rectify itself over a few minutes.  However, it didn't. Instead, I saw a message on the screen for all of Disney's cable channel properties (ESPN, ESPN2, ABC, F/X, etc.) that explained that Disney was asking for too much money for Spectrum to carry its channels, and was working to resolve it.  Is this the first salvo at the end of the cable TV revenue model?

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The current cable model is slowly proving that it is not sustainable over the long term.  The way cable works is that the company will offer you a certain number of channels (like a bundle), whether you watch them or not, for a monthly fee. Certain channels, like ESPN, benefitted from this arrangement and generated massive amounts of revenue, which in turn paid for the media rights for extremely popular sports leagues, like the NBA, the NFL, and Major League Baseball (MLB), to name a few.  ESPN is the flagship of the cable bundle.  This business model benefitted other industries too, like cable news and entertainment channels.  CNN and later Fox News and MSNBC grew their profits from this bundle arrangement.  Revenue grew for HBO, Showtime, and STARZ too. Clay Travis, the founder of the sports site Outkick, wrote a long-form article (Sep 7, 2023) that lays out the problem with this crumbling business model, which hit its peak around 2014, when ESPN had approximately 100 million subscribers.

He believes that peak, especially since ESPN was on top of the world, generating millions of dollars a month in fees, which was used to secure media rights of billions over several years, for many of the most popular sports leagues in America.  In the first year alone of 2023, ESPN and its sister channels generated close to $14 billion in revenue and had $3 billion in profit, according to Fortune's Paige Hagy (August 3, 2023).  There was a 6% drop in revenue from the previous year and profit was down 29%. The article points out that revenue for the network continues to decrease in significant levels and streaming alternatives are the primary cause.

Over the years the company raised its monthly fee on cable platforms and continued to pay even large media rights packages along that timeline.  Those television deals increased the revenue for the owners and players to split, thereby driving up the earning power for players through lucrative contracts, and increasing the valuations of the sports franchises themselves.  It also put ESPN on the hook for televising games, without actually owning any of the content, as Mr. Travis stated.  The network was just leasing or renting the product for those games and made money through advertising. Once the games ended, ESPN had no further use for, or "ownership" of it.  Very few people would go back and watch a game again unless it was memorable, or if it was a championship game, and even then, the viewership numbers for those re-broadcasted games were minuscule.

During those boom years, the network was flying high, with solid viewership, and record-breaking profits during its highpoint of the aughts (2000-2010), but that would not last.  If ESPN was an ocean liner, then no one seemed to notice that an iceberg was in its path, as was aptly described, and one which could lead to its demise.  The 'iceberg" in this case was the process of cord-cutting, where cable subscribers would cancel the cable portion of their bundle because there was no need to pay such large monthly costs for channels they never watch.  I would assume, based on my experience with cable company's customer service, that they would make it hard for people to quit, but they apparently did.  Outkick's Travis writes that, by 2023, cable cord-cutting reduced ESPN subscriber list by 30%, an eye-catching number because it means that the network lost millions of households over a short time frame.

One revenue stream that was holding constant was the need for a modem and internet connection, including but not limited to broadband.  Since most of us spend a lot of time on the internet, for business, keeping up with friends and family, and commerce, it is a must-have necessity. The large cable companies (Comcast, Charter/Spectrum) know this, and I believe in this case Charter/Spectrum had the upper hand in their fight with Disney. Why?  Charter/Spectrum knew that Disney needed them more than they needed Disney's channels.  I believe if you viewed reliable data collected for various reasons why subscribers canceled their cable, it most likely would show that while people don't need cable, they do need an internet connection.  Americans are not going to cancel that.  Charter/Spectrum called Disney's bluff, and they prevailed because the company made a large bet on access to and use of the internet that would be a steady flow of positive revenue.

Charter/Spectrum and other large cable companies are partially putting some of their capital into streaming and programming, but also betting that other streaming giants like Netflix, Disney (Disney+), and Amazon (Amazon Prime Video) will prove fruitful with their content.  However, based on recent reporting, streaming is not proving to be the cash cow many had hoped it would be. Netflix, the "Original" of streaming, generates billions of dollars worldwide per month due to membership fees but continues to lose money in order to generate content.  Recently, Reuters detailed that lackluster revenue in the most recent quarter, and caused share prices to drop (July 2023).  The company has to repeatedly seek large loan amounts so creators can develop content for members to watch.

At some point, revenue must exceed investment costs.  Disney+ and Amazon Prime are not riding high either (especially Disney+ or its Star Wars extended universe content, which doesn't appear to be gaining new fans or generating large enough revenue streams through viewership). ESPN has tried to get into the streaming game (ESPN+), but Travis believes that the majority of casual sports fans are not going to fork over monthly fees to watch games they could have for free.  Additionally, they might end up losing media rights to tech behemoths like Apple (which already has the rights to Major League Soccer through Apple TV+) and Amazon Prime, which already shows the NFL on its Thursday night package.

Which brings us back to the next phase of the cable wars. Where does it lead? Mr. Travis thinks that cable will have to change its bundle model.  If these companies don't adapt, the entire cable bundle business model will collapse, as he pointed out. People are more savvy now and will learn to push for options where they can choose which channels they want, and which they will not pay for.  I don't see too many Americans paying for things they do not need or want but have to pay for regardless. Rosy projections from these cable channels about a desire to pay for quality content are I believe, bordering on delusional.  

Garret Searight, of Barrett Sports Media (May 22, 2023), believes all the doomsday reports of ESPN's demise are overblown. He feels that because the network generates almost $775 million in cable subscriptions before advertising revenue is added, it will be fine. Mr. Searight also thinks that if ESPN moves to a direct-to-consumer model since it has agreements with the major sports networks, and the Southeastern Conference (SEC), the most popular college football conference, it will be protected from the cord-cutting bloodbath that is affecting other media companies. His premise is that most consumers who have cable have it primarily to watch sports, so if the network breaks away from cable, it should continue to be profitable. Additionally, Mr. Searight firmly believes that if ESPN forms its own streaming platform, sports fans will pledge their allegiance to it, and that will be the straw that breaks the cable bundle's proverbial back.

Per the Outkick article, the NFL, the most popular sports league in America, has only 3 million subscribers for its NFL Sunday Ticket package. If the country's most viewed sports league can only get a fraction of fans to pay for its comprehensive Sunday content, what makes these cable channels think that consumers will pay a premium for sports leagues they show only a casual interest in? I think ESPN knows this because one of their overt tells recently was to seek new investors for their channel, and had asked some of the richer American sports leagues (NBA, NFL) along with other entities, to become a shared partner in a new business model.

I do not share Garrett Searight's faith in ESPN's future revenue projections.  While I do think that sports continue to be the most reliable viewing for consumers, I am not sold yet on the idea that a majority of Americans will want to pay to watch sports, especially casual fans. If the NFL cannot get more than 3 million people to pay for its aggregate Sunday viewership platform, what makes him believe that people will do that for the other major sports? ESPN can spend money buying media rights precisely because of its dependable monthly revenue from the cable bundle. If it didn't have that financial support for its business model, I don't see large enough numbers in paying consumers to improve upon what it generates currently. I foresee a decrease in ESPN's revenue regarding a potential move to sole streaming.

If cable companies are smart, they will have a system set up where consumers can pick up channels via a line item system (which will then show up on their monthly bill for them to see) and be able to pay for what they want.  I believe subscribers to these cable companies will more likely keep their subscriptions overall if this comes to pass.  I also agree with Travis in that the business model that has allowed ESPN and other large cable channels to obscenely prosper for many years, is now facing a reckoning which will be the end of the cable bundle.  How these channels adapt, and try to become appealing to sophisticated consumers, will determine if they survive at all.  As a sports fan, I thought I would never see the day when ESPN could become extinct.  That is an extreme outcome, but could potentially come to pass. With the sands of time and new rivals to its business model, anything is possible now.  Let's see if Disney (and ESPN especially) correctly determine which way the wind will blow next.

 

PAC-12 is Dead: College Football Is All About Money Now.

 

September 1,2023

College football over the last 10 years has seen monumental change, with universities abandoning conferences, and severing decades-long rivalries and relationships, in pursuit of massive amounts of television money and a path to a 'national' championship.  For now, its popularity continues to thrive.  However, over the long term, college football is entering unchartered territory, and its future and relevance hang in the balance. One of the casualties of this chaos is the PAC-12 Conference, the "Conference of Champions."  It has produced many individual and team titles but in primarily non-revenue generating sports, such as soccer, track & field, tennis, golf, and swimming. Its undoing was mostly due to a lack of overall success in the multi-billion-dollar world of college football, where television money is king.

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The Pac-12 Conference morphed over the years from various incarnations to what it was briefly in the last 8 years, with schools mostly from the West Coast and the 'four corners' states of Colorado, Utah, and Arizona.  It began in 1915 as the Pacific Conference with four founding schools, which at that time included the University of California at Berkeley (Cal), University of Washington, University of Oregon, and Oregon State University. A year later the conference added Washington State University, followed by Stanford at the end of that decade. A few years after that the conference added the University of Southern California (USC), and the University of California at Los Angeles (UCLA). It went through a few other forms before finally becoming the Pac-8, made up of those schools minus Idaho and Montana, who had joined for a few years but left for other conferences (Wikipedia).  In the late 1970s, the conference added the University of Arizona and Arizona State University to become the Pac-10, which did not change for close to 30 years.

During that time, a few schools became name brands, notably USC, UCLA, Washington, and Oregon. USC especially, became part of the national consciousness, winning several national titles under legendary coach John McKay in the 1960s and 1970s and 4 Heisman Trophies (for best college football player) by their running backs (Mike Garrett, O.J. Simpson, Charles White, and Marcus Allen). Their commissioner at the time was Tom Hansen, a dedicated servant to the athletics departments of its member schools.  He was not a visionary by any means, but he put the conference first and made schools improve their revenue generation to compete nationally.

During a period of 30 years, (1962-1992) USC, and once each by UCLA and Washington, was able to claim an outright or shared national title, which was respectable, but not what other conferences were able to produce (BIG10, Southeastern Conference (SEC), or Big-8/Big-12 and Big East) during that same time span. There were long periods when none of the PAC-12 schools were relevant nationally.  

National championships were at times shared between schools (USC and Alabama in 1978, Washington and Miami in 1991for instance) so the television networks, along with the major conferences, created a format whose goal would pit the top two schools in a title game, which was called the Bowl Championship Series (BCS).  The first game of this new type of format took place in 1998 when the Tennessee Volunteers defeated the Florida State Seminoles.  This format, was itself flawed because it based its rankings that determined the two finalists on subjective opinions of sports journalists.  The PAC-12's only representative in the format was USC, which played in 2 consecutive BCS title games, winning one (in 2004, which was later vacated due to sanctions by the National Collegiate Athletics Association (NCAA).

I think one of the reasons for the lack of relevancy between PAC-12 member schools was that although they generally cared about being competitive in football, they did not care as much as presidents, athletic directors, and boosters (supporters) of schools in other conferences. Those conferences just cared more, which resulted in more money being spent on facilities, coaching staff, and stadium improvements which in turn attracted recruits and ambitious coaches.  Additionally, fans and boosters spent more money on their fandom, and the aggregate passion amongst those groups showed in the university's product on the field and producing players that were ready for the NFL. Over time, that passion led to better television deals with the networks, such as ESPN, NBC Sports (for Notre Dame football only), and Fox Sports.  ESPN and Fox Sports have massive deals with the SEC and BIG10 that separate them from the others. The SEC Network and The BIG10 Network, which is popular amongst fans of those conferences, drive high viewerships for its member schools and generate revenue that other conferences can only dream about.

This revenue gap is the primary reason that other conferences lose members and will most likely fade away, the PAC-12 being the main one so far. The dominoes began to fall at the beginning of this century when the Atlantic Coast Conference (ACC) was able to poach schools from The Big East (Syracuse, Boston College, Virginia, and Miami), which effectively ended that conference overnight. In 2011, Missouri and Texas A&M left the Big 12 and moved to the SEC.  Around the same time, Colorado left the Big 12, and along with Utah, moved to the PAC-12.  This game of musical chairs intensified when Texas and Oklahoma, two titans and power centers in the Big 12 announced recently to join the SEC in 2025.  That effectively crippled the Big 12, but the conference didn't fold. It was able to rebound and bring in new schools Brigham Young University (BYU), University of Central Florida (UCF) University of Cincinnati (UC), and the University of Houston (UH). These invites helped stabilize the Big 12 and it was able to secure a viable television deal that saved the conference.  Time will tell if it will be a player in the new era of college football.

This leaves us with the conference that now requires hospice care. The PAC-12 traded unassuming Tom Hansen in for a "new age" commissioner, Larry Scott in 2009, who prioritized image over substance (moved the conference headquarters to expensive San Francisco, and assumed a PAC-12 Network, similar to the SEC and Big10, would become highly lucrative and turned down expansion at a time when they should have done so). He, along with university presidents and athletic directors, had a chance to incorporate Oklahoma and Texas into their conference in 2011 but decided against it when the deal included bringing in their in-state siblings Texas Tech and Oklahoma State. In hindsight, it should have been a brilliant move, one that would have made the PAC-12 the nation's premier conference with its various athletic sports (football, basketball, soccer, baseball, etc.). Instead, those schools left for the SEC, the Big 12 is on stronger footing, and the PAC-12 is now on life support. 

Once USC and UCLA saw the writing on the wall, in that their payouts per year from a new television deal with their current partners would pale in comparison to the BIG10 and the SEC, the schools formally notified their conference that they had accepted bids from the BIG10 to join in 2024.  The financial gap between the PAC-12 the BIG10 and the SEC would be too great to match, and they would fall behind, especially in football, and realize they had to break relationships and rivalries in order to remain competitive with their national aspirations to become relevant again. With the addition of USC and UCLA, the BIG10 now becomes a coast-to-coast conference, one that boasts name brands such as Penn State, Ohio State, Nebraska, Michigan, Wisconsin, and now USC and UCLA.  It is the reason their new television deal is lucrative ($7 billion over 7 years with NBC, Fox Sports, and CBS), with yearly payouts per school to be between $80-$100 million, something the PAC-12 could not offer both Los Angeles schools.

Once USC and UCLA left, the remaining schools had to adapt and make choices quickly.  Colorado returned to the BIG12 and brought Utah along with it.  Later, the University of Arizona and Arizona State left a sinking boat and were accepted by the BIG12 as well. That left four remaining schools, Washington State, Oregon State, Stanford, and Cal. While the two academic powers in the Bay Area have attractive appeal nationally, there is no final decision on their end yet. For Washington State and Oregon State, the best option would be to join the Mountain West Conference.  They may not make as much money, but they would get more stability in return. As of now, no new movement has been verified, but effectively, the PAC-12 needs to be given its last rites soon. George Klaviakoff, the current conference commissioner, is the captain of the Titanic now. He needs to jump into a lifeboat. The ship is going down.

Television money is what college football has more of, and that made the universities lots of money, which they spend lavishly for their alumni, hiring the best coaches at market value, and seeing their endowments rise with football success.  The sport has moved away from "mythical" national titles, into formats that let play on the field determine who is best. However, there is a cost for this largesse.  Long-standing rivalries, academic relationships, and the ability to travel to your favorite away game in a college town will be lost.  It has shown that colleges and universities care a lot about money, rather than academics, especially when it fuels success in athletics, notably football and basketball. Tradition, history, and symbolism will be traded in for excess in facilities and spending. That is what motivated USC and UCLA to leave a conference they have been a part of for decades.  

It goes to show that leadership and foresight do play a large role in financial success in college athletics.  The SEC and the BIG10 have or have had, conference commissioners that saw the value in being aggressive and confident with their product (football), and the value of that product has generated large sums of money for their schools.  It helped that their fans were some of the most passionate around the country. The PAC-12 had a commissioner who did not understand what he had and assumed what he did not (rabid fan base), and convinced conference presidents and athletic directors to put all their chips in a television network that would not bear fruit. Instead, it would become an albatross around the neck of potential revenue streams that would have allowed the conference to be competitive nationally.  They focused more on what schools would be a better fit academically during a potential expansion (Texas) rather than what schools would help generate viewership for their product (Oklahoma, Texas, Texas Tech, and Oklahoma State) and bring in revenue to make them serious players on the national scene.  As a result, the PAC-12 was undone by obtuse presidents and athletic directors trusting a commissioner who could not deliver on what was required in this new era, money and viewership of their product. This made the conference less competitive and ultimately ruined their future as a group and splinter into schools looking out for themselves.

RIP PAC-12

1915-2024