CRYPTOCURRENCY IS HERE TO STAY

 

 

“I can say with almost certainty that cryptocurrency will come to a bad ending.” Warren Buffet

 

Recently, my commentary discussed the need to improve financial literacy in America. This week, I will provide some basic information on a type of investment that only a few short years ago seemed too risky and volatile for even the most seasoned investor to consider – cryptocurrency, also known as crypto.

This perception is about to change. The election of Donald Trump will bring crypto into the mainstream of our financial system. While many of us may never purchase any crypto product, like artificial intelligence, crypto now deserves our attention. At a minimum, we should understand what it is and how it works.

Bitcoin, which was launched in 2009, was the first cryptocurrency, and it remains by far the largest of the numerous offerings. By mid-2024, there were 10,032 different digital currencies in this asset class with new types of crypto constantly coming to market.

Crypto operates as a digital alternative to traditional money issued by governments. The currency is often called a "coin" because it represents a unit of digital value that can be exchanged like a traditional physical coin, even though it exists solely online.

To maintain a record of who is buying and selling crypto, a technology known as “blockchain” confirms and records all transactions on a publicly available digital ledger. The blockchain replaces the need for financial institutions to hold currency and to track its movement. In theory a blockchain is tamper proof and designed to prevent any type of fraudulent transaction.

To make a crypto transaction, a user simply needs a “wallet” or digital address which holds each individual’s digital currency.  An access “key,” known only to the user, ensures private and secure transactions. A buyer authorizes the movement of a specified amount of crypto from his/her wallet to the seller’s wallet address. For the system to work efficiently businesses known as digital currency exchanges are required. These entities act as clearing houses and online marketplaces for the purchase and sale of crypto.

Advocates of crypto believe it is the future of money.  However, according to a recent survey by Pew Research, only 17 percent of U.S. adults have owned any crypto product.  In addition, a majority of Americans over age 50 view crypto with skepticism and are not confident of its safety or reliability.

Two examples help illustrate why the public has been suspicious of the crypto market. First, in 2022, the large crypto exchange FTX was widely regarded as safe and one of the best organized. When FTX failed because of mismanagement, including embezzlement of billions by its founder, Sam Bankman-Fried, the very foundation of the crypto industry was shaken and came under attack.

Second, among all asset classes, crypto has one of the most volatile trading histories. This is because crypto is not traded on its fundamentals. It is traded on speculation of future price movements. 

The currency has experienced several massive rallies and spectacular crashes since it first became available. This month, the total value of the top 125 crypto coins— stands at $3.6 trillion, some $2 trillion of which is Bitcoin, just over 55 percent. That’s up 124 percent year to date and 1,720 percent over the past five years. But it is important to remember that Bitcoin also fell over 71 percent from September 2021 to November 2022.

The Biden administration began a push to regulate the crypto industry under its Securities and Exchange Commissioner Gary Gensler. This agency sought to categorize the vast majority of crypto as securities. It proposed strict rules for formation and operation of crypto assets. In a recent setback for Gensler, the SEC was forced by courts to review its denial of certain Bitcoin-related investment products, including exchange-traded-funds. Gensler will resign from the SEC before the Trump Inauguration and will be replaced by crypto-friendly Paul Atkins.

Trump made the removal of the SEC boss and the favorable treatment of crypto a promise to the industry while on the campaign trail. Following the proposed nomination of Atkins, the price of bitcoin surged above $100,000 per coin for a new all-time high.

On December 6, the investment site Barron’s observed, “We are about to be governed by the nation’s first unabashedly pro-crypto administration. Instead of being stymied by the federal government, the crypto cosmos will soon be enabled—nay, driven—by Trump and his team.”

One of Trump’s campaign promises that most excites the industry is his plan to create a national strategic reserve of bitcoins. A strategic reserve is a set of external assets that are immediately available and under the control of the monetary authorities. Under the plan, crypto would be incorporated into the mix of assets that the nation has on its balance sheet with the aim of diversifying reserves.

 J.P. Morgan analyst Ken Worthington recently told his clients, “The anticipation of a more crypto-friendly environment under a Trump administration is driving a surge in crypto business initiatives.” To help the industry, it is reported that Trump is considering the elimination of capital-gains taxes on cryptocurrencies issued by U.S.-registered companies. 

Some worried business leaders point out that it is now unlikely that any meaningful regulations will be promulgated to protect the public from disasters like the FTX bankruptcy. While crypto is moving into the financial mainstream, investors need to carefully weigh their options.

 

A YEAR OF DISCOVERY AND WONDER

 

In many respects 2024 has not been a year to foster fond memories. Two major wars continue to rage in the Middle East and in Eastern Europe. Natural disasters domestically and abroad, destroyed thousands of lives. Around the world, liberal democracies were challenged by authoritarian political actors.

In the United States, while the wealthy benefited from a rising economy, inflation made it difficult for many Americans to maintain their standard of living. Following the national election, half of the voting public was at first depressed and then angered when a convicted felon, Donald Trump, was easily elected president. The country remains more divided than ever.

While many aspects of human social progress appeared to backslide in 2024, significant technological and scientific advancements exploded. These events did not garner our attention like the many social disruptions. Thankfully, important scientific discoveries happen in an environment independent of societal changes.  Scientific and medical progress is not linked to how people think, interact or treat each other within a society. For the most part, scientists continue to challenge accepted solutions until better ones are discovered, free from political conflict.

To encourage some year-end holiday joy and “good will toward men,” I will highlight some amazing discoveries that should give us hope for the future.

Energy. “Water splitting” to form hydrogen and oxygen using solar energy in the presence of semiconductor photocatalysts has long been studied as a potential means of clean, large-scale fuel production.  In 2024, there were advances in using photocatalytic sheets to split water into its elements using the power of the sun. Photocatalytic reactors can be used in a variety of applications, including the conversion of pharmaceuticals, wastewater treatment, and air purification. 

The Heart. It may soon be possible to “repair a broken heart.” Previous heart developments included tests that identify hidden heart disease and images of a “digital twin” of a patient’s heart that enables precise pre-surgery modeling.

Major progress was made in using genetically modified pigs to provide personalized organ donors. A company called “Organamet Bio” has mastered growing heart cells from stem cells cultured from a patient’s blood. The cells are “engrafted” into a scaffold created with a pig’s heart that closely resembles the human heart anatomically. Clinical trials will begin soon.

In addition, advances have been made to regrow heart muscle after heart attacks using stem cells. This approach would reverse rather than alleviate chronic organ illness. According to the Wall Street Journal, “Damaged heart muscle affects about 6.5 million people in the U.S. and is the leading cause of hospitalization among Medicare patients.”

Cancer Treatment. Researchers are making great strides toward developing vaccines that instruct healthy people’s immune systems to eliminate the presence of cancer before it can develop. According to Dr. Ajay Bansal from the University of Kansas Cancer Center, “It is the future of cancer prevention.”

In fact, a cancer-vaccine renaissance is underway after decades of false starts. A better understanding of the immune system has rejuvenated the field. Companies like Moderna, that helped develop the Covid-19 vaccine, are working to bring new treatments to market.

Pre-cancer and cancer cells know how to hide from the immune system. The new vaccines use proteins that cancer cells produce to train the immune system to hunt down the abnormal cells. The new vaccines boost the immune response and direct it where to go.

Help for the Blind. Blind people are missing out on how the rest of us use electronic devices for reading, movies, and accessing the internet. New touch technologies are about to bring screentime to the blind. Specialized digital devices are being manufactured that display raised braille text and tactile graphics, refreshing in real time. Researchers are working on ways to permit live sports to be followed by touch.

A South Korean company, Dot Inc., has created an electromagnetic system that allows thousands of tiny pins to move up and down on the surface of a digital pad that is part of a refreshable braille display.

According to the Center for Disease Control and Prevention, more than seven million U.S. citizens have impaired vision. One million are totally blind, and 50 percent are unemployed. Experts have determined that in education “listening is not literacy.”  The blind must be able to access books, classroom materials, and technologies in order to be productive. The South Korean device, the “Dot Pad” is making this possible.

Ultrasound waves treat addiction. Neuroscientists have long defined addiction as a brain disease. Now, some addicts are undergoing a procedure where more than 1,000 probes of ultrasound waves are directed to the brain’s reward center. The goal is to reset harmful thought patterns.  In many cases, addictive cravings immediately disappeared. Therapy and coping mechanisms are introduced as part of the treatment. About 75 percent of participants remained substance-free several months later.

Artificial Intelligence. In 2024, the biggest technological development under discussion was artificial intelligence. According to computer scientist and author, Ray Kurzweil, “Artificial intelligence will reach human levels by around 2029. Follow that out further to, say, 2045, we will have multiplied the intelligence, the human biological machine intelligence of our civilization a billion-fold.”

If this prediction is correct, our social disputes, policy making and scientific discoveries are about to meet head on and shape the path of civilization. May this holiday season give us time to reflect on how such a future could benefit all of humanity.

 

 

 

 

 

 

 

 

 

IMPROVING FINANCIAL LITERACY IS IMPORTANT

  

Financial literacy is defined as “The ability to understand and effectively use various financial skills, including personal financial management, budgeting and investing.” In recent years, personal finance has become more complex. It is now more important than ever to understand the economy and how to employ the newer credit and investment products offered to the public.

Financial decisions we make between the ages of 25 to 65 can help provide for a comfortable retirement. Moreover, the financial literacy we accumulate during our years of working becomes invaluable when we come to depend on Social Security, retirement accounts and savings to maintain a reasonable standard of living.

Unfortunately, many older adults were never exposed to financial literacy. They did not receive any education or even advice to develop a sound financial plan.  With no strategy in place to reduce debt and increase savings, they often end up with inadequate fixed incomes and are unable to enjoy their golden years. In addition, many seniors left financial decision-making to a now-deceased spouse. These individuals lack financial knowledge and are more vulnerable to monetary fraud.

Financial literacy for young adults presents a different problem. The economy has dealt them a bad hand with the COVID-19 recession, high interest rates, college loans, and expensive housing. A November survey found that 64 percent of those between the ages of 27 and 42 have delayed a major financial decision because of the economy.

When young people experience bleak economic conditions, learning about and applying sound financial decisions seems less important. Peer pressure encourages short term “fear of missing out.” Disposable incomes are squandered on trendy clothing, travel, and entertainment. Saving for the future is not on their radar.

When it comes to investing, younger adults are unaware of the proven slow and steady wisdom of Benjamin Graham’s classic book The Intelligent Investor. Instead, social media encourages get-rich-quick investments offered by products like cryptocurrency and questionable cult stocks like GameStop and AMC theaters.

Online investment platforms, which are often designed to mimic sports betting sites, attract younger adults. The New York Times has reported that on the investment app Robinhood, young people buy and sell the riskiest financial products. Their inexperience has often led to staggering losses.

One in-depth barometer of personal financial health is the 28 questions given annually to US adults, known as the P-Fin index. This survey, developed by the TIAA Institute and the Global Financial Literacy Excellence Center has long been an accurate test to determine financial knowledge.

Data from the 2024 index reveals that financial literacy in the US has stayed constant at around 50 percent for eight consecutive years. The index explores eight functional areas across finance, such as earnings, savings, insuring, and comprehending risk. The results show that Americans appear most comfortable with financial knowledge on borrowing, saving, and consuming and the least confident financial risk.

Among the results, financial literacy with women has consistently lagged that of men by 10 percent. In 2024, young adults correctly answered only 37 percent of the survey questions. Individuals with low levels of financial literacy are twice as likely to be “debt constrained” and “financially fragile.”

Annamarie Lusardi, Senior Fellow at the Stanford Institute for Economic Research helped to organize the data from the report. She explains, “Financial literacy is an essential skill in today’s society. The consistently low levels of financial literacy among the most vulnerable groups are troubling.  It is high time to change the conversation about money, starting with adding financial education in schools and colleges.”

How do we ensure that more Americans are taught sound financial practices at an early age? Every year, more research and published reports extol the importance of teaching financial literacy. But a recent survey completed by Intuit found that 81 percent of high school students continue to get financial knowledge only from their parents.

Advocates for financial literacy agree that at least one semester of a stand-alone finance course would address the problem. To be effective, the offering cannot be diluted by weaving it into math or economics courses. Teacher training is another hurdle to overcome. Public education must be willing to spend resources to develop training programs and effective curriculum materials.

Instilling financial responsibility at a young age sets students on the path of long-term financial wellness. The key components of financial literacy would include: 1) understanding how money is spent through budgeting, 2) learning how to use credit cards and other forms of credit responsibly, 3) studying interest rates and debt repayment strategies, and 4) receiving financial education on different investment options.

Teaching financial literacy would benefit our society as well as individuals. Informed financial choices would help reduce poverty and elderly dependence on Medicaid for long-term health care. For younger Americans, planning and achieving financial goals for retirement would replace casual decision making. Mental health would improve by reducing financial stress.

Older Americans also require strategies for financial literacy. The “Money Smart for Older Adults Program,” developed by the FDIC, is one of many good options. It raises awareness among older adults and their caregivers on how to prevent fraud, scams, and other elder financial exploitation. The curriculum encourages advanced planning and informed financial decision-making.

Improving financial literacy is time and resources well spent for individuals and for our society.  Unexpected monetary setbacks affect us all. Financial literacy can help us plan ahead and soften the blow.

 

 

 

VOYAGE TO THE DEEP BLUE SEA

 

“How inappropriate to call this planet Earth when it is clearly Ocean.” Arthur C. Clarke

 

Recently, I needed a diversion to escape the unrelenting noise of pundits trying to explain the election results and its aftermath. Half of the country is predicting the end of democracy and the other half praising the return to a better populist America. I decided to remain silent and let the future unfold.

The corner of my desk was piled high with books I had been reading during the campaign. These political and historical studies defining authoritarianism and defending democracy needed to be temporarily packed away. Following the Inauguration, when the former president returns to action with his wrecking ball there will be plenty of time for comment.

A friend suggested I take up the word puzzle, Wordle, as a healthy alternative. I discovered that, unlike my spouse and many others, my knowledge of five-letter words was limited. Also, my patience for word games was slim.

Instead, I turned to a book that the Financial Times has called one of the best science studies of 2023, The Blue Machine: How the Ocean Works by Helen Czerski. The author is a physicist and oceanographer at University College London. Her writing skills were sharpened as a science columnist for the Wall Street Journal.

Generally speaking, we humans spend most of our days surrounded by land. It is easy to forget that the ocean covers 71 percent of the Earth's surface and contains 96.5 percent of the planet's water. When we check the local weather or air quality, we are not thinking that the ocean regulates climate and is the planet’s greatest source of oxygen.

When we visit a zoo or marvel at the wildlife that surrounds us, we are not remembering that the ocean is home to a more diverse variety of life from microscopic organisms to the 100-foot-long blue whale. When we gaze at the night sky in wonderment, it is hard to believe that humans have explored only 5 percent of the ocean. Many of the species that live there have not been discovered.

The Blue Machine is an excellent book for those looking to escape the emotional impact of the election. It provides an invigorating ocean voyage while explaining how the vast expanses of saltwater operate as “the engine for the earth.”  The physics behind the ocean’s systems are more complex and interdependent than one could imagine.

In the book’s introduction Czerski sets us up for what we are about to read: “This isn’t merely a diverting tale about some salty water. This is the story that defines planet Earth.”

The author uses stories of history, culture, and sea animals to present her scientific points. She explains how water temperatures, salt water, gravity, and even the movement of the Earth’s tectonic plates all interact to keep our planet and its oceans intact. The book is replete with helpful diagrams and illustrations.

I agree with other reviewers that Czerski not only explains how things work, she does so with “poetic awe” that captures the wonder and beauty of the ocean. For example, we know that the ocean intercepts incoming energy from space and prevents it from escaping. Czerski’s eloquent explanation is: “The Earth is just a cascade of diversions, unable to stop the flood of energy but tapping into it as it trickles past. The ocean is an engine for converting sunlight into movement and life and complexity, before the universe reclaims the loan.” Who needs to dwell on Trump’s madcap cabinet choices with prose like that.

The book introduces the reader to the unseen, interlinked systems of currents, ocean walls, and underwater waterfalls that define the ocean. Gaining some basic understanding on what is going on in seven tenths of the planet that is not covered in land was an eye opening and humbling experience.

The last section of the book gives the reader some discouraging news to consider. It is not a topic the author wanted to dwell on. She laments, “I wish so much that I could have written an ocean book that ended with pure celebration…with nothing but a positive exciting future to look forward to.”  Czerski then lists all the events that threaten the ocean.

First, climate change is causing ocean temperatures to rise with alarming speed. Second, billions of pounds of plastics, micro-plastics and nano-plastics, smaller than the dust particles we breathe, are washing into the oceans. The plastics are affecting aquatic species in ways scientists are only now beginning to grasp. Third, excess carbon dioxide we send into the atmosphere is absorbed by seawater. This lowers the ocean’s Ph and impedes the growth of corals and shellfish. Fourth, excessive nutrient runoff, algae, and higher temperatures cause oxygen deprived patches of water. These “dead zones” now cover millions of square miles of ocean. Fifth, the “Atlantic Meridonal Overturning Current” is shifting to potentially catastrophic patterns due to the introduction of meltwater from Greenland’s glaciers and Arctic ice. Lastly, government subsidized and illegal fishing have caused an extreme decline of fish populations worldwide.

While it is tempting to ignore the ocean as “nearly infinite and incorruptible,” it is time we wake up and understand the realities of living on a planet with limits. What this book taught me is that we need to fully understand how the ocean works before we can save it.

 

 

 

 

 

 

 

 

 

 

NONPROFITS PLACE FINANCIAL BURDEN ON CITY OF WASHINGTON

  

Nonprofits are critical to the welfare of communities across America. They range from small organizations with a charitable purpose to religious institutions, hospitals, and universities. Most U.S. organizations granted nonprofit status by the IRS have one thing in common. They are generally exempt from paying taxes. Cities and towns lose billions in tax revenue even though a nonprofit benefits from the same public-school systems and municipal services as the struggling individual or private business across the street.

It is astonishing that local residents complain about paying taxes and become furious at any tax increase but say nothing about nonprofits that have no tax obligation. After all, full time police and fire protection, municipal pensions, liability and vehicle insurance, city management and employee salaries, infrastructure and road maintenance are becoming more expensive every year. One fire truck can easily cost over $1million. Most nonprofits are contributing little or no financial support.

This commentary will examine how nonprofits in the City of Washington have placed an undue burden on finances. I recently met with Finance Director Ken Westcott and Deputy Finance Officer Susan Koehler in the beautiful Washington City Hall Council Chambers. They graciously explained Washington’s budget, growing expenses and shrinking revenue. Every city taxpayer should pay attention.

Mr. Westcott remarked that “while the world has changed, the Pennsylvania tax code regarding nonprofits has not.” There has been little attempt to legislatively update the definition of “public charity.” There has been no meaningful debate in Harrisburg to determine which nonprofits are operating to truly serve a charitable mission or which organizations require tax exempt status to perform their mission. While religious institutions and small chartable entities likely deserve tax exempt status, entities like hospitals, nursing homes, and colleges raise questions.

Adding to the problem, larger nonprofits have a history of expanding their physical footprint and removing additional private real estate from the revenue producing tax rolls. Over the years, Washington & Jefferson College has been a major local offender. The college has consistently purchased private property surrounding its campus and elsewhere within the city limits.

In another example, the City of Washington’s big brother, Washington County, recently struck a major blow to the city’s tax collection efforts. Not only did the County overpay to purchase the Crossroads Center building, the purchase denied the city $180,000 in tax revenue each year.

Mr. Westcott and Ms. Koehler described a grim picture of Washington’s tax base and efforts to provide all the services that city residents have come to expect. This year, the budget will be in the range of $16 million. Fifty-seven per-cent of the city’s tax paying residents are classified as low to moderate income. Eleven percent are over sixty-five and on fixed incomes.

On the revenue side of the equation, forty-seven per cent of the city’s real estate is tax exempt. There are 42 exempt churches within the city limits. Washington Hospital and W&J are tax exempt. The City of Washington is the county seat and receives no revenue from government related buildings. All local and state government offices, the courts, social service organizations that assist the entire county and public housing are off the tax rolls.

With little help coming from Harrisburg to address this municipal drain on revenue, “agreements to provide payment in lieu of taxes” have become an alternative. These voluntary agreements, known as PILOTs, typically commit a nonprofit to make some payment to the taxing authority. Ideally, the payment would be a reasonable percentage of the amount the nonprofit would pay if it were not tax exempt. Unfortunately, the city has little leverage to compel cooperation.

The city sends notices to nonprofits informing them what their liability would be for police and fire services if they were obligated to pay taxes. A robust response would bring in over two million. If a reasonable portion of the tax obligations of W&J ($513,000), Washington Hospital ($402,500), the County Housing Authority ($108,000), and others were actually paid, balancing the city budget would depend less on those who can least afford it.

The experience with PILOTs in Washington has been discouraging. Last year, the city collected only $10,000 in small PILOT payments from several churches and charitable organizations. A formal PILOT agreement with Washington Hospital pays $64,000, and one with the Housing Authority provides $25,000 in revenue. While many American colleges have formal PILOTS with the city where they receive substantial city services, W&J pays nothing.

What can be done to address this imbalance that places an undue burden on regular taxpayers and the city budget?  

First, nonprofits should step up and meet with city officials to establish fair agreements to produce revenue. Nonprofits could voluntarily contribute to city projects that benefit them the most. For example, stormwater management programs are typically calculated based on the road frontage on an owner’s property. This approach directly links fees to the stormwater impact of each nonprofit.

Second, Washington County must recognize that the city, as the county seat, is the heart of county government. The commissioners should avoid removing private property from the city tax rolls. The county should provide free demolition and other big-ticket services to the city.

Third, private citizens concerned about city taxes and services should contact their elected representatives and seek legislative reform. It is not enough to complain at the last minute when an increased tax bill shows up in the mail.

THE STATUS OF MEDIA IN AMERICA

 

The Oct. 21 issue of New York Magazine, in its usual sensationalist style, did a deep dive report titled “Can the Media Survive?” The magazine interviewed 57 of the most influential people in the media industry to determine what is going on and where media is headed. I found this mashup of opinions greatly entertaining and decided to use it as a basis for exploring the status of media in America.

According to Radhika Jones, editor-in-chief of Vanity Fair, the new environment is “like the fire swamp in the ‘Princess Bride’. It is treacherous in places, you could go up in flames, you could be attacked by a rodent of unusual size, but you can always be a bit of a pirate and anticipate those threats and figure out how to defuse them.”

Media executives agree that the Internet crushed the traditional advertising business. Nicholas Thompson, CEO of The Atlantic, sums up this digital “creative destruction:” “All newspapers lost their classified ads, the local newspapers lost their monopoly on distribution for certain regions, and the magazines lost their monopoly on distribution among certain interest groups. Twenty years ago, if you wanted to sell golf balls, you bought an ad in Golf magazine. Now you buy a Facebook ad targeting people who have re-upped their golf-club membership.”

It is interesting that several digital brands like news websites Buzz Feed and Vice followed the fate of many print publications and failed. These entities often forgot that the simple task was to make content and sell sponsorship against it. They became too dependent on venture capital. They also placed themselves at the mercy of Facebook and Google. Eventually the media giants strangled many of the small companies that depended on them for success.

The media mantra today has returned to the simple concept of “make something worth paying for.” Bloomberg editor-in chief John Micklethwait summed it up this way, “If you don’t have a system whereby you have consumers paying for your content, then you are generally in a perilous state.”

Subscription revenue through a paywall is now an important business model. But being an all-things-to-all-people digital news site is difficult to pull off. In 2024, the executives who run Conde Nast and People magazines spent $50 million to reach a massive national audience with a news website (The Messenger) and failed. There was no clear vision of who they were trying to reach and why they were relevant.

On the other hand, many niche news sites with limited viewership and low overhead are doing well. Betsy Reed, editor of the Guardian US, sums up this new perspective: “My generation was wired completely differently. We wanted to be read or listened to by as many people as possible. And now this new generation is like, I’m totally cool with having 9,000 die-hard fans.”

The New York article describes a number of small media sites I had never heard of. For example, Puck is a pricey digital newsletter that aims to cover our country’s four centers of power: Silicon Valley, Hollywood, Washington and Wall Street. The stories appear to be gossipy, provocative, and interesting.

What other niche players are having a good year? The article gives several examples. Mark Halpern founded a startup video platform called “2WAY”. He curates nightly live Zoom calls for an eager audience. “The Ringer” is a sports and pop culture website and podcast network acquired by Spotify in 2020. Ezra Klein co-founded a news website, VOX and is now named one of the best podcast hosts.

“The Daily Wire” is an American conservative media company founded by political commentator Ben Shapiro. It has expanded beyond the traditional audience that consumes only political content. Lastly, “Barstool Sports” captured the attention of young men. This “bible-of-bro-culture” started out in 2003 as a weekly print publication distributed for free and now generates yearly revenue of $90-$100 million.

When discussing the legacy newspapers, the article claims that “everybody is jealous of the New York Times.” The Times became relevant and wildly successful by pivoting from “the” newspaper for everyone to “the” newspaper for their core readers. The paper sits on 10 million paid subscriptions that are unlikely to dwindle. In the opinion of former CNN boss Jeff Zucker, “They figured it out first – how to make a killing off recipes and games like Wordle that could sustain the rest of their journalism.”

Many believe that the new Wall Street Journal editor, Emma Tucker, has taken the newspaper into the firm number two spot behind the NYT. On the outside, the L.A. Times and the Washington Post fight over the same educated, liberal readers.

Recently, the legacy newspapers have gotten into the social media game by launching email newsletters, driving traffic back to their paywalled websites. Legacy newspaper editors still seem to care about their print editions. At the same time, it is not where their focus is going forward.

Most of the executives interviewed expressed anxiety over how artificial intelligence will affect the media industry. Established media businesses can either sue AI companies for copyright infringement or strike a deal to license content for training AI models. Either way, if consumers get used to asking an AI interface for the news, AI could displace traditional journalism.

For those seeking to learn about cutting-edge media in our changing “age of information”, this wide-ranging article has much more to offer.

 

 

 

THE MOTOROLA SOLUTIONS RADIO CONTRACT: WHAT WE KNOW

 

On November 1, a letter from Commissioner Nick Sherman was published in this newspaper criticizing Allegheny County for its Home Rule system of government. Sherman also praised his efforts in being a conservative watchdog of taxpayer dollars.

Sherman said nothing to update the public on the status of the Motorola Solutions radio contract, a multimillion-dollar fiasco, orchestrated by his administration. The contract has all appearances of being badly mismanaged, or worse. This commentary will attempt to pull together all that we know and raise questions about what we don’t know concerning the recent efforts to install a costly emergency radio system for first responders.

As reported by the Observer-Reporter, “The radio system has been a divisive topic for nearly two years after the previous county board of commissioners, led by then chairwoman Diana Irey Vaughan awarded a $22.545 million contract to MRA Inc. in March of 2023.  Maggi sided with Irey Vaughan to approve that contract, while Sherman voted against it since he favored a [more expensive] proposal from Motorola.”

“Irey Vaughan retired in January and was replaced on the board by Janis, who voted with Sherman to terminate the MRA contract. Sherman and Janis then voted to select Motorola’s proposals despite the county having already spent $8.5 million on equipment as it began working to install the MRA system last year.”

We know that the $8.5 million in purchased equipment for the first contract is sitting in a hangar at the Washington County Airport with no plans to use or to return it.

We know that the terminated vendor, MRA, submitted a new proposal. It was again the less expensive option. For unknown reasons it was thrown out by the county public safety committee. Motorola was the only proposal approved by the committee. 

We know that an entity called Mission Critical Partners has been awarded two consulting contracts by the Republican commissioners to oversee the installation of the radio contract. Mission Critical Partners also worked closely with the public safety committee in recommending that Motorola be awarded the contract.

We know that inexplicitly, the Motorola proposal was initially approved in August by the two Republican commissioners, with no physical contract for the commissioners or the public to review. A second vote was taken at a special meeting on September 23, apparently after an actual contract was completed. The contract was not disclosed.    

We know that following the September meeting and vote to approve the contract the Observer-Reporter filed an open records request to obtain the contract and three proposals. The Republican Commissioners denied the request. An appeal was filed with the state Office of Open Records. Finally on November 1, heavily redacted copies of the documents were released that revealed few details on the cost or scope of the multimillion-dollar project.

We know that after the contract was awarded, Motorola informed the commissioners that county-wide radio coverage would be less than expected unless an additional 3-5 radio tower sites were included at an added cost in the millions.

When I questioned Commissioner Larry Maggi in early November, he stated, “I have not received the completed unredacted contract and the final costs of the radio contract are still unknown.”

We know that after terminating the less expensive MRA contract, two months later, the Republican Commissioners reversed themselves. They temporarily reinstated MRA to perform needed upkeep on the current system until a new network is built. According to the O-R, “After reviewing the intricate details of the current system, Sherman thought it would be better to maintain the status quo."

We know that possible conflict of interest questions remain unexplained between the Nick Sherman for County Commissioner political committee and Motorola Solutions. According to filed campaign finance reports, over the past several years, Motorola Solutions has been a consistent contributor to Sherman’s committee. Moreover, Motorola Solutions has sponsored Sherman fund raising and political events.

We know that the Pennsylvania State Ethics Commission’s guiding principle is that of public trust and that any effort to realize personal financial gain through one’s public office is a violation of that trust. This would include soliciting or accepting a political contribution based on an understanding that the public official would be influenced.

There remains a great deal we do not know about one of the most expensive contracts in the history of Washington County. What is the real reason for redacting the contract and bids? Why was the initial Motorola proposal approved without a contract? What are the total costs in terminating the MRA contract and now installing and maintaining the Motorola system? Why was MRA excluded in the second bid? What do we not know about the relationship between Sherman and the consultant, Mission Critical Partners, and with Motorola?

The Sherman letter to the editor criticizing Allegheny County’s Home Rule form of government, ignores the fact that before taxes go up there will be a spirited debate with the 15-member County Council. Under Home Rule, Executive Sara Innamorato’s proposals are subject to Council’s scrutiny and approval.

In Washington County, there are presently few checks or balances on Sherman’s decision making. Janis votes with him without question. Maggi is denied information and input on important issues. The public is kept in the dark. It appears that the critical oversight, open debate, and full disclosure offered by a Home Rule form of government is exactly what Washington County needs.

 

 

 

 

AFTER THE ELECTION

 

“Democracy is the worst form of government except for all those other forms that have been tried from time to time.” Winston Churchill

By the time this commentary is published, several days after Election Day, we should know who will occupy the White House for the next four years. Whatever the result, following years of highly charged political rhetoric, misinformation, emotional manipulation, negative advertising, personal attacks, and foreign election interference, one fact is clear. Our nation is deeply divided on the direction the country should take.

Nonetheless, whatever final decision is made by the nation’s voters, those who supported the losing candidate should step back and accept the result. The new goal should be to collectively move our nation forward and not to normalize disruptive, partisan politics.

In the aftermath of an election, the attacks against the opposing political party typically calm down. This is also when finger pointing and second guessing within the losing party normally begins.  If the election is as close as predicted, there will be a barrage of lawsuits filed in the battleground states challenging voting irregularities that, if past is prologue, did not take place.  While there may be limited confrontations on Election Day, I would not expect any organized violence after the votes are counted.

How do we recover as a nation from this critical moment? After all, one half of the country voted for a candidate, Donald Trump, who was a convicted felon and equated with fascism by his own Chief of Staff. Many respected legal scholars have concluded that Trump’s goal is to end liberal democracy as envisioned by the founding fathers. The other half voted for Vice President Kamala Harris, who had low approval ratings for working in a Biden administration perceived to have caused high inflation, chaos at the border, and an inability to manage foreign conflicts. Tens of millions of voters expressed diametrically opposed hopes and fears for and against each of the presidential candidates.

On the economy, Social Security, tariffs, health care, taxes, abortion, other social issues, and foreign affairs, there were few matters on which the two candidates found common ground. The one exception was the decision by both campaigns to ignore the largest problem facing the economy – the national debt of $36 trillion.

I disagree with both candidates who have called this election the most divisive and important in our nation’s history. The election that unleashed the Civil War in 1860 had a greater immediate impact and lasting influence. Today’s America is the economic, military, and technological envy of the world. Other nations are baffled how such a prosperous, free society can be so politically divided. But then again, no other country had an election campaign that lasted four years.

The problem was former President Trump’s refusal to concede defeat in 2020. The country has been contesting the last election and gearing up for this year’s voting nonstop since the Jan. 6 attack on the Capitol. The endless stream of civil lawsuits, criminal indictments, primaries, conventions, rallies, and debates has brought the political polarization to a fever pitch. Now that the election is over, it is time for all of us to calm down.

After this divisive election comes an opportunity for some self-reflection. Each of us can accept the irrefutable fact that in a pluralistic society, there are many ways to view the world that do not match our own. Everyone who voted deserves our gratitude for participating in this important function that defines democracy. We should respect all widely held opinions, no matter how contrary to our own.

I have listened to and talked with hundreds of voters in our community and across America since 2020. Getting out of my comfort zone has been more enlightening than staying within my silo, only listening to and reading those who agree with me. The backgrounds, economic situations, and opinions of Americans are more diverse than any nation on earth. These differences are the foundation of democracy in a multicultural society.

The candidate who wins a national election for our highest office is a reflection of who we are as a people. It is not the winning candidate that is unthinkable, it is the inability to vote in a free and fair election. Unhappy voters should consider the plight of those living in Russia, China, Iran, North Korea, and other authoritarian states where there is no choice.

In my case, living this past election cycle through the lens of a dedicated liberal and lawyer, a Republican victory will challenge many of my core beliefs and policy positions. However, in a healthy democracy, my place is not to lodge personal attacks against those who supported the winning candidate. My task going forward is to continue to follow my values and to expose actions that I believe undermine democracy. Hopefully, my reasoned arguments, backed by verifiable facts, will convince some voters in the next election to consider my analysis.

After the election, we must hold on to our shared humanity and love for community alongside our political differences. Healthy democracies build on their common ideals rather than wallow in negativity.

On a lighter note, there is a small consolation for those who supported the losing candidate. Each day you will be able to nod your head in agreement and smile rather than cringe, when reading the daily political cartoons making fun of the president.

 

 

 

 

HAS PROFESSIONAL BASEBALL STRUCK OUT?

 

On a recent Thursday night, I found myself watching a major league baseball game (MLB). The New York Yankees were battling the Cleveland Guardians to determine who would represent the American League in the World Series. I could not identify any of the players with the exception of a few well-known Yankees. 

Tuning into a baseball game not involving the Pirates was unusual for me. I had little interest in which team won. Nonetheless, the game became an exciting sporting event with a fairytale ending. Cleveland was winning until the eighth inning when the Yankees hit back-to-back home runs to take the lead. The Guardians came back in the ninth inning to hit two home runs, each time with a man on base to win the game. The Cleveland stadium crowd was over-the-moon, and the baseball world was astonished at the turn of events. 

This game was not my normal baseball experience. I find most games tedious to watch. Baseball provides little of the non-stop action found in almost every football and many basketball and hockey contests.  What was once “America’s Game” is now a sport that is finding it difficult to recruit our best young athletes or the attention of spectators. Has professional baseball struck out and become a minor sport in America?

The 162-game MLB season is a good place to begin when analyzing the problems facing the sport. The long schedule now opens at the end of March when many parts of the country are experiencing cold weather or worse. As the temperature warms, baseball must compete with the NBA basketball and NHL hockey playoffs that run from mid-April to mid-June each year. From the end of June until the beginning of September, MLB only competes with professional golf tournaments and the Olympics every four years. However, during these warm weather months, there are many alternatives to attending a game in person or watching on television.

The month of October should be MLB’s time to shine and captivate the sports fan. This year’s World Series features the game’s two best teams, the Yankees and Dodgers, and two best players, Aaron Judge and Shohei Ohtani. Unfortunately, every night in October other attractive sporting events are available. The NFL, NCAA, and high school football seasons are in full swing. Professional basketball and hockey are opening their seasons. Sports fans who attend games and spectators on the couch must make hard choices on what to watch.

Boston University did a deep dive into baseball’s problems and concluded that “Baseball’s days as America’s pastime are long gone. Football is the top-watched sport by US adults. In a recent Gallup poll, 41 percent of respondents named football as their top choice. Baseball and basketball only earned about 10 percent. While older adults remained loyal to baseball, young adults increasingly pick basketball and soccer as their first choice.” Simply stated, baseball is too boring and is losing younger sports fans.

Team owners and general managers would argue that MLB has held its own in recent years. In 2023, attendance increased by 9.2 percent, with a total of 70,747,365 fans buying tickets. MLB revenue increased by 10 percent to an average of $378 million per team.  The All-Star game attracted 7.6 million viewers, a 6 percent increase from the previous year.

Other observers argue that these statistics are misleading and that the trends are not promising. In 2003 fan attendance was 9 million less than in 2007. Even newer ballparks and those of popular teams are awash in empty seats representing billions in lost revenue.

TV viewership is down. The 2023 World Series was the least watched on record at under 10 million, a staggering 23 percent drop from the prior season. In contrast, the NCAA Women’s March Madness final drew an audience topping 15 million.

What can MLB do to reverse the trends and to address the number of challenges it faces? First, the Guardian Newspaper places the major blame on the pitching dilemma, “Many of MLB’S most talented star pitchers are falling to injury as their elbows buckle under the stress of throwing max-effort on nearly every pitch…Remarkably, all of these injuries have come during a time when ballclubs have cradled and coddled pitchers to the point where getting more than five innings out of a starter feels like something to celebrate.”

Many critics believe that starting pitchers should be required to remain in the game for 6 innings. Pitchers would then modify their throwing style, and the game would become more interesting with fewer pitching specialists.

Second, the Pirates are a good example of a team that has not been competitive in decades. MLB needs to adopt measures to produce team parity. In the NFL a salary cap produces more competitive teams.

 

Third, baseball technology has led to more strikeouts and homeruns at the expense of other facets of the game. Recent rule changes to speed up play and generate more stolen bases were a good start.  More innovations are needed.

Fourth, the regular season should be shortened. Beginning the schedule in warmer weather and ending it before football season takes over would make for a better sport with increased interest.

The author and commentator George Will has written, “Baseball is Heaven's gift to mortals.” With some well-placed modifications, the game of hitting, fielding, pitching, and managing can maintain an important role in American professional sports.

 

 

 

  

THE ALLURE OF BIRD WATCHING

 

Those of us in retirement have adopted a slower pace with empty nests. No longer are we anchored to a punishing work schedule while nurturing a growing family. As seniors, we get to slow down and watch the frantic activities taking place in other unique nests. The action is year-round with a changing cast of characters. I am referring to birds.

According to the U.S. Field and Wildlife Service some 57 million Americans feed the birds for the allure of observing them from the comfort of their homes. During the pandemic, this number skyrocketed. Bird feeding is a big business. Americans spend $4 billion each year on about a billion pounds of bird seed. In addition, millions of pounds of suet are deployed throughout our nation’s backyards.

Bird watching outside the home has also caught on with older folks. My wife and I have visited many domestic and foreign locations where bird watching became part of the adventure. Observing the shore birds and twice-yearly migrations through Chincoteague, Virginia has always captivated us. We will never forget the many varieties of colorful hummingbirds or noisy parrots from Costa Rica. During our trip to the Serengeti in Kenya and Tanzania, we saw more varieties of unusual birds than mammals and reptiles combined.

However, nothing makes us happier than observing the life cycles of the local birds in our backyard aviary. From the short visits of Baltimore Orioles and Rose-breasted Grosbeaks, and the one-time nesting of a family of Brown Thrashers, to an unusual two-week show of Barred Owls at dusk, and our regular year-round bird population, there are always new surprises.

Watching a family of Chickadees or Cardinals nest, fledge and take over the yard keeps us filling the feeders and bird baths year-round. Coming face to face with a curious hummingbird is close to a spiritual experience.

Why does bird watching captivate us? One book to read is Feeding Wild Birds in America: Culture, Commerce and Conversation. (Baicich, 2015) The Council for Environmental education calls the book “a fascinating history of our love affair with feeding birds...wrapped with wonderful insights on how bird feeding can be used to connect people to nature right at our doorstep. It's a treasure.” In reviewing this study, the National Audubon society says “This book chronicles our growing love affair with birds.”

One of my favorite authors is Joanathan Franzen, fellow Swarthmore graduate and winner of the National Book Award. As Franzen got older and began looking up while walking through Central Park in New York City, he fell in love with birds. His observations in an Audubon Magazine interview are educational, heartwarming and worth repeating, “There have been two kinds of amazing animal developments.  One is us—in terms of totally transforming things—and the dinosaurs were the other. And the birds are what became of dinosaurs. The dinosaurs got all light and they got feathers, truly one of the remarkable adaptations in the history of evolution. They sing. They fly. They make nests. Flight, the complexity of their behavior, their beauty.  You can love nature in the abstract and care about it, but once you actually start having an emotional connection with part of nature like birds, then it becomes a wholly different thing.”

Other factors draw those of us in retirement to become enamored with birds. Bird seed is not expensive. Bird watchers in the field only need a pair of binoculars and a smart-phone app, or guide-book for identification. The moderate physical exercise is exactly what our physicians are recommending.

Retirement biological clocks often come into sync with the local bird population. We go to bed earlier, after the final robin chirps in mid-summer. We wake up early on spring mornings to a loud chorus of nest builders. Now we have the time to pay attention.

A study published in 2024 in the Journal of Environmental Psychology finds that “even half an hour of bird watching makes us happier, healthier and can help foster a deeper connection with nature.” The psychological concept of “noticing” is an essential aspect of awe. Noticing means that our full attention is on the birds rather than ourselves. Moreover, being in nature and noticing wildlife requires us to immerse ourselves in the activity. This provides “a deep engagement and profound sense of tranquility through prolonged observation.” 

Bird watchers become fully engrossed in identifying bird species, deciphering their behaviors, and observing their actions. After being “in the flow” birdwatchers “can experience a rush of endorphins and a profound sense of satisfaction and wellbeing.”

One would think that bird watching is an activity that is above the controversies that have recently divided America. After all, in our back yard, even the “red” cardinals and the “blue” jays seem to get along.  However, on Oct. 3, NPR reported that birders are arguing over a plan to change dozens of bird names. It seems that the American Ornithological Society wants to do away with those names that honor people. The goal is to rename over one hundred North and South American birds to purge names with links to racism and colonialism. Many birders are not happy and the upcoming debate promises to be bitter and divisive.

Thankfully, none of the bird species of Pennsylvania appear to be affected. We can continue to post the photos and common names of our backyard visitors without offending the neighbors.