An Appeal, A Banana, Slippery Stats

Thirty dollars or thirty-five cents or six million dollars, you decide.

David Roberts

Nov 23, 2024

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Dear Reader,

This post starts with my annual ask for you to consider becoming a paid subscriber.

I donate all subscription revenues to The Robin Hood Foundation, the leading organization in New York City devoted to fighting poverty. Over the past year, paid subscriptions have raised $10,000 for Robin Hood. I asked my friends at Robin Hood what $10,000 means in terms of various alternative good works.

Here are two examples.

Combatting Hunger: $10,000 provides about 12,000 meals at food pantries.

A quote from Robin Hood about the low cost of the meals:

“Accounting for all our food pantries, cost comes out to about $0.80/meal. It’s this low because food is either donated, rescued (good food that would otherwise be throw away), or purchased in bulk.”

Interventions for isolated mothers suffering from postpartum depression: On Wednesday, I heard Allie speak at Robin Hood’s Heroes Breakfast. Allie is a single mother who was suffering from devastating postpartum depression. She had nowhere to turn, no one to confide to. In her despair and in her own telling, she came close many times to ending her own life and that of her baby.

Before it was too late, Allie found her way to Bonded By Baby, a Robin Hood-supported organization that supplies comprehensive support for isolated new mothers like Allie. That support turned Allie’s life around. Twelve months of Bonded By Baby support costs about $900, so $10,000 can help, or save, eleven mothers and their babies.

The contributions raised by my newsletter are very special to me. They come from a collective of nearly 200 readers. There’s something uniquely potent and heartwarming about a community coming together for a good cause.

The Match: As I did last year, I’m offering to match one for one any new paid subscriptions made in the months of November and December. If you subscribe for $30, I’ll donate an additional $30. If you subscribe for $100, I’ll donate an additional $100. If you increase your current subscription amount, let me know at robertsdavidn@gmail.com, and I’ll match your increase.

If a subscriber wants to test the limits of my matching, I say, “go for it.” I make this challenge with some specific subscribers in mind. People I know who might relish a financial dare or who can’t resist snatching up from the ground any thrown gauntlet.

Important: I don’t differentiate between readers who pay and those who don’t. Anyone who allows me into their email feed is not at all “free.” You give me your attention and your time, and those are precious, limited assets. This newsletter and my determination to make it worthwhile would not exist without you.

And now for a banana

I’m obsessed with the six million dollar banana that sold at Sotheby’s this past week.

The banana of course does not last long. It must be eaten or replaced before it rots and smells. According to a NYT article, this soon-to-be celebrity banana was purchased on the morning of the auction for thirty five cents from a Manhattan fruit stand. Thirty-five cents is expensive for a banana; it was purchased on the Upper East Side where everything costs more.

The seller was a collector who may have been an original buyer of one of the three masked bananas that sold in 2019 for $120,000 or so. I would have been flabbergasted at that price so who can say whether the six million dollar buyer won’t eventually realize some fantastic return on his buy of this conceptual artwork.

“Conceptual” means that what the buyer of the art owns is a certificate of authenticity and explicit instructions on how to affix the banana to the wall. That’s it. There’s nothing to prevent any of us from taping our own bananas on the wall except a modicum of common sense.

Any asset untethered to conventional values of cash flow, usefulness, or recognized aesthetic value can fly at whatever height someone is willing to pay. There are no limits.

We can’t know if this sale is a sign that we’re nearing the zenith of a spectacular financial bubble. The buyer made his fortune through cryptocurrencies so clearly he’s been adroit at playing the game of bubbles. As for me, I’ve missed out completely on both Crypto and concept art.

Plus I don’t like bananas.

The accepted view of the American economy may be bananas

I subscribe to the newsletter of a wonderful economist named Danielle DiMartino Booth who writes under the banner of Quill Intelligence.

There are a number of things that make Danielle and her Quill Intelligence special. First, Danielle is a superb writer and brings to her pieces all sorts of fascinating cultural and historical stories that relate in clever ways to the information that she’s about to convey. She’s a pleasure to read.

Second, she’s an economic detective who investigates the more subtle data behind the brute and blunt headline numbers.

Danielle has been building a compelling and alarming case that the headline numbers on employment and the health of the consumer are unreliable and present a sort of Potemkin Village economy, one that is far weaker than we might think, especially for anyone not perched on the highest reaches of the socio-economic ladder. 1

The biggest story is employment.

If you follow the markets or if you read news headlines, you may be aware that every month the Bureau of Labor Statistics (the ”BLS”) estimates the total number of jobs in America gained or lost. A difference from expectations of 25,000 or 50,000 jobs can have a significant impact on investors’ views of the economy’s direction and in turn the direction of the stock market and interest rates.

What you may not know, because they don’t receive much publicity, is that the BLS periodically issues revisions to its initial published data. The revisions are usually modest but lately not so much. An August revision “removed” 818,000 jobs from previously estimated job growth in the twelve months from April 2023 through March 2024. That was an almost 30% decline and the largest revision in the last fifteen years.

Here’s Danielle in yesterday’s Daily Quill on the more recent revisions that were released this week.

“What we don’t know is what job creation has been. We are learning more about history, however, with every revision that’s published. On Wednesday, we learned from [a BLS report] that private sector job growth in the year ended June 30, 2024 was 737,000, a smidge [sarcasm alert!] off the 2.331 million first reported….It’s almost as if a BLS Statistician slipped on a very expensive banana and broke their fall with a broken model.” 2

Here’s a link to Quill Intelligence, highly useful for any person or organization interested in the economy.

Trust issues

The implications of what Danielle is reporting go beyond economics. If private employment growth numbers were overstated by three times, faith in the BLS would be justifiably undermined.

Further, it’s inevitable that BLS would be accused of political motivations for its initial, pre-election, robust estimates.

The public’s trust for another institution might bite the dust.

The Border Takes A Bite Out Of The Center

Sam Kahn

recently wrote a terrific essay called It’s The Epistemology, Stupid. (Only Sam would combine the word “Stupid” with the SAT/Spelling Bee word “Epistemology” in his title––yes, I had to look it up.)

Sam’s essay was a take on the 2024 election and his title a riff on James Carville’s famous advice that “It’s the economy, stupid.”

The major point of Sam’s essay is that the “Center,” represented by traditional institutions like mass media, pollsters, the CDC, the FBI, and perhaps the BLS, relies on a different truth than the “Border,” represented by independent journalists, writers, and thinkers, many of whom you’ll find on Substack.

Danielle’s economic reporting comes from the Border and relies on painstaking research gathered from many sources including subscribers like me. (I think I was the first to alert her to the $6 million banana.)

Up until very recently, the Center had dominated accepted truth for all of modern society’s history. But now that’s changed. Sam attributes the change to the power of the internet as a communications tool, the widespread availability of data through on-line resources, and the diminished faith in experts stemming from our Covid tribulations.

For better or worse, Sam sees the 2024 election as another sign that the Border is gaining ground on the Center.

Moreover, if the election result was “the economy, stupid” and Danielle is correct that we have been living in a hidden recession, then that would explain the disconnect between positive headline economic numbers and so many voters seeming to be dissatisfied with the economy.

What we can do

There’s not much we as individuals can do to influence the economy or national politics.

So to bring it back to my appeal, what we can do is help people in desperate need. Whether it’s feasible for you to support Robin Hood through a paid subscription or to encourage someone to do so, please consider it. Thank you.

Sparks from Culture by David Roberts

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