DEI: Didn’t Earn It

It’s time to ridicule DEI out of existence. [The Rude Awakening] March 22, 2024 [WEBSITE]( | [UNSUBSCRIBE]( DEI: Didn’t Earn It [Sean Ring] SEAN RING Dear Reader, My goodness, how I wish I had come up with that myself! Sometimes, the truth just smacks you in the face. And in this case, I’m glad it did. Boeing’s doors coming off, Disney’s awful gender-swap live-action films, and BlackRock’s failed social investing initiatives all point to one thing: it’s time to call time on DEI. And those are just a few choice examples at the moment. But as I was scrolling through X a few days ago, I saw this post: [pub] I’m unsure if Cheong invented the term or passed it on, but I loved it immediately. And then, I took no further heed of it. Until yesterday, when I saw this: [pub] If you don’t recall, Scott Adams is the author of the Dilbert comic strip. He was canceled for not going along with The Narrative. [Your Credit Card: Declined?]( [Click here to learn more]( Take a moment and picture this scenario: The line at the gas pump is getting longer as you insert your credit card for the second time. You decide to head in and ask the cashier what’s going on. There’s a long line inside. The woman in front of you looks frustrated. Everyone does. “There’s nothing I can do. You’re declined,” the cashier says to the man at the front of the line. It’s not just you. Everyone is declined. Something doesn’t seem right. A sinking feeling sets in as you realize something has gone terribly wrong. [Click here now for an urgent new prediction from a former advisor to the CIA and Pentagon.]( [Click Here To Learn More]( A Few Anecdotes When I was in Hong Kong, I talked with a colleague from another bank. He, too, was a forty-something Vice President and married father-of-four who had no chance of promotion. When I asked him why he thought that was, he said, “Well, in The West, diversity means ‘hiring non-white people’ into jobs. In Asia, it means ‘favoring the local talent.’” He knew he’d never get promoted unless he left his current bank and joined another one at the next level up. And those jobs, of course, were going to the local talent, no matter their capability level compared to his. In essence, he was trapped. Another friend of mine was looking for a job in London. Like me, he had a Master’s in Finance from London Business School, decades of experience, and was a chartered accountant. Crickets. I asked him why he thought he couldn’t get a job. He said, “Well, I’ve talked to some recruiters.” They said, “We’re just waiting for a stock market crash.” “Why?” “Because we’ll be able to place white people again.” The upshot was that banks were hiring younger, more diverse, and hence, cheaper talent into vice president roles rather than hiring properly experienced and more expensive directors and managing directors. However, as banks are quasi-government entities that will always be bailed out, they don’t have to follow the usual business rules of getting the right talent for the right jobs. Momentum takes care of much when the US Treasury unconditionally backs you. Why DEI Was Good I’ll give this to DEI: it got good people out of their steel towers and into entrepreneurship. Many high-IQ folks were shaken to their core and out of their slumber by being passed over one too many times. The relentless, inescapable conclusion was, “I’m never getting promoted, no matter how well I do.” I can tell you, I’ll never again do a dance for a manager in a large corporation who’s several magnitudes beneath my intelligence level. I’m sure there are millions—really—who think the same way. The explosion in entrepreneurship, solopreneurship, and small business ownership attests to the fact that it’s never been easier to start a business. Nor will you have any excuse not to… if you’ve got what it takes. Quite frankly, the technology for running a business has become so intuitive that the “circle” of people who have what it takes has never been wider… and it keeps growing wider. The tricky part of running a business, what you get paid for, the organization, is almost completely taken care of by technology. In this sense, we must be grateful for all the new ideas that would’ve died inside larger organizations had those smart folks been promoted and paid according to merit. Why DEI Must DIE But now, those vast corporations on whom we depend so much, are being hollowed out. Their talent is leaving in droves. Why? Because they’re not getting what they deserve in terms of pay or respect. When the right people don’t get into the right jobs because of HR’s manic mission to make everything equal, bad situations arise. For example: Poorly implemented DEI backfires: If DEI becomes a box-ticking exercise or if quotas are seen as unfair, it breeds resentment among employees who feel qualified candidates are being overlooked. Focusing on DEI distracts from the company’s core business. If DEI initiatives take up too much time and resources, they undermine the company's core mission. Unintended consequences of inclusion efforts: Being inclusive is tricky. There are challenges in ensuring everyone feels valued without micromanaging interactions. Lastly, as we now consider recent Harvard grads nothing special, DEI hires are found out quickly and tarred with a brush. Wrap Up No one and I mean no one, is against enforcing existing laws to ensure that the best people get the right jobs regardless of their race, color, or creed. But we’ve overstepped the bounds of propriety and implemented an oppressive corporate regime where the best get passed over because of their race, color, or creed. What made America great were the limitless possibilities a talented individual had to make their way in the world. What DEI has done is threaten America’s once unassailable corporate advantage. So remember, DEI means “Didn’t earn it.” Pass it around… Have a wonderful weekend! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( In Case You Missed It… Prez Pressuring Powell? [Sean Ring] SEAN RING When Jay Powell looks in the mirror, he wants to see Paul Volcker. But by the end of his run as Fed Chairman, he may see Arthur Burns. You may not remember Arthur Burns at all. But just over 50 years ago, Burns was the Chairman of the Federal Reserve. Richard Nixon nominated him for the job more because Burns was a conservative rather than an eminent economist. And it was a stroke of genius, that move. Because Burns lowered interest rates in 1972 to help get Nixon re-elected. In a fascinating paper titled “[How Richard Nixon Pressured Arthur Burns: Evidence from the Nixon Tapes]( by Burton A. Abrams, the author makes some choice observations. Here’s the first one that caught my eye: In Nixon’s 1962 (p. 309-310) book, Six Crises, he recounts that Arthur Burns called on him in March 1960 to warn him that the economy was likely to dip before the November election. Nixon writes that Burns “urged strongly that everything possible be done to avert this development. He urgently recommended that two steps be taken immediately: by loosening up on credit and, where justifiable, by increasing spending for national security.” But when then–Vice President Nixon took this recommendation to the Eisenhower Cabinet, “there was strong sentiment against using the spending and credit powers of the Federal Government to affect the economy, unless and until conditions indicated a major recession in prospect.” Nixon sums up: “Unfortunately Arthur Burns turned out to be a good prophet.” This episode stuck with Nixon. First, Nixon blamed a modest rise in the unemployment rate as one of the reasons he lost the presidential election to John F. Kennedy in 1960. Second, the messenger was indeed a good prophet. The second statement demonstrates Nixon’s power over Burns: Richard Nixon demanded and Arthur Burns supplied an expansionary monetary policy and a growing economy in the run-up to the 1972 election. … M1 growth increased in each of the three years, starting at approximately 4.5 percent growth in 1970 and ending at slightly over 7.5 percent annualized growth over the first half of 1972. M2 growth expanded even faster. Real growth in the economy was accelerating, too. In 1972, real GDP grew 7.7 percent and certainly helped Nixon in the election. Abrams continues: Thus, a monetary stimulus helped to boost the economy in time for the 1972 election, helping to deliver Nixon’s landslide victory. However, the excessive aggregate demand stimulation prior to the election created serious problems for the economy that took nearly a decade to resolve. And how about this telephone conversation on December 10, 1971: With fewer than eleven months until the election and four days until the next meeting of the Federal Open Market Committee, Burns and Nixon have a private telephone conversation. Burns states that “I wanted you to know that we lowered the discount rate...got it down to 4.5 percent.” “Good, good, good,” replies Nixon. Burns indicates that the announcement of the discount rate reduction would be accompanied by the usual statement that it was done in order to bring the rate into line with market conditions, but with an added statement that it was done to “also further economic expansion.” Burns exclaims that he also lowered the rate to “put them [the Federal Open Market Committee] on notice that through this action that I want more aggressive steps taken by that committee on next Tuesday.” “Great. Great,” replies Nixon. “You can lead ‘em. You can lead ‘em. You always have, now. Just kick ‘em in the rump a little.” Burns urges the president to do something about the Pay Board and the Cost of Living Council, who, in his opinion, are “holding back recovery” by squeezing businesses by restraining price increases relative to wage increases. Burns adds adamantly: “Time is getting short. We want to get this economy going.” Note: The discount rate is the interest rate the Federal Reserve charges commercial banks and other financial institutions for short-term loans. The discount rate is applied at the Fed's lending facility, which is called the discount window. The discount rate played a more important role in monetary policy in 1971 than it did in recent times and usually was set below the federal funds rate. I write all this because I want you to know the Federal Reserve’s “independence” is, in the words of our Muddlehead-in-Chief, a load of malarkey. [Nvidia’s CEO Leaves Crowd Speechless…]( Behind closed doors… He took center stage… And left the crowd utterly speechless. What happened? This tech billionaire revealed a breakthrough technology [that will change everything you know about making money](. (Experts are predicting a $150 trillion megatrend!) [See for yourself right here]( Could this be “The Steve Jobs iPhone Moment” for Nvidia’s CEO? [See the full story for yourself here](. [Click Here To Learn More]( Powell’s Press Conference Below is yesterday’s market, split out by 10-minute candlesticks. Do you notice anything at 2 p.m. (14:00)? [The rude awakening] The SPX, Nazzie, and Dow roofed it. Bitcoin (not shown) jumped over $7,000 to nearly $68,000. Why? It's because Jay Powell isn’t taking away the punch bowl. In fact, he’s loading us up for more! The FOMC statement opened up like this: Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. If that’s the case, why are rate cuts even on the table? NikiLeaks got it right in today’s [Wall Street Journal]( Higher housing prices and stock-market gains are boosting wealth and thus supporting consumption, especially in high-income households. The price of bitcoin has recently surged to records, a sign of exuberant risk-taking. With GDP growth at 3.2%, inflation at 3.1%, and unemployment at 3.9%, Jay Powell is still discussing three rate cuts this year. Incredible? Not if you remember Burns and Nixon. NikiLeaks continued: Democrats are nervous that higher rates are sapping consumer sentiment and risking a slowdown ahead of November’s elections. This week, a handful of the most liberal lawmakers called on Powell to cut rates. “We read these letters with respect,” Powell said. “But at the end of the day…we have to make our judgments.” It’s not a question of “If,” but “When?” when it comes to rate cuts, regardless of what the data reads. Wrap Up Everyone wants something for free, especially money. That’s why no one wants to pay interest. But if we’re going to have a functioning economy, we need appropriate, market-determined interest rates. The old men in the Fed are too susceptible to political pressure, especially when they don’t want to work for Orange Man. Cutting rates here will feel really good. But leaving rates too low for too long will lead to problems that will take a decade to fix. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. 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