Howdy All, a few Interesting Items for your information. Enjoy –
In this issue –
1. Gerrymandering
2. Iranian Oil
3. Starship IFT 12
4. Powell
5. Pot
6. Agent
7. Billionaire Tax
1. Gerrymandering. SCOTUS issued its Opinion on Louisiana v Callais Wednesday. The opinion struck down the use of Section 2 of the Voting Rights Act to mandate majority minority race based congressional districts. The 2022 Louisiana map has a pair of districts stretching down the Red River along I-49 from Shreveport to Baton Rouge. Note the condescending logic of the majority minority districts – that people are only capable of being properly represented by people of their same race, a notion that spits in the face of hundreds of years of American history and experience, not to mention its founding documents. The 6-3 opinion found racial gerrymandering was unconstitutional. The opinion was released last week despite the best efforts of Justice Kagan and the rest of her minority to slow-roll the opinion until it was too late to draw maps for the midterms. The ploy didn’t work as Red States rushed to redistrict. Florida was first up with a redrawn map, which was passed out of the legislature and signed by Governor DeSantis this morning. Texas new map was approved by the courts a week or two ago. Alabama and Georgia are expected to be next. Louisiana Governor Landry suspended elections pending passage of a new map that eliminates the racially drawn districts. Note that it doesn’t take all that long to draw new maps, less than a day with current software. Approval by legislature, governor and surviving court gauntlet will take the most time. Racially drawn congressional (and legislative) districts are most prevalent in the south for congressional maps. The new maps will put somewhere between a few to over 50 congressional districts in play this year. Note that the new districts are a zero-sum game. When you move democrats into Republican districts, you water down the red majority. It also works the other direction, with solid blue districts becoming distinctly more purple. None of the current festivities guarantee a district will flip from one party to the other. That will be decided by how fired up the AWFL-led, murderous democrat base is and how many conservatives will stay home in November. While the food fight will be awesome to behold, it has the potential to tamp down the current redistricting craze at least for this round after a while. OTOH, it may very well exacerbate it, as SCOTUS continues to allow political gerrymandering subject to whatever the limits established in state constitutions (usually compact and contiguous districts). Court fights will be based entirely on state constitutions, which open the door for some really horrible outcomes, as democrat judges are ready, willing and able these days to flex their judicial muscle to obtain whatever outcome is most advantageous to the left, a practice not limited to the blue states as we here in Alaska have painfully found out over the years. Federal courts generally stay out of these fights, though do take up the occasional case on a civil rights violation basis.
2. Iranian Oil. Much has been made of the impending collapse of the Iranian oil patch due to the blockade. I think a deeper look is worthwhile. The most important thing about the oil business is that its pieces are sized based on throughput – how many barrels per hour or day are the pipelines, the storage and processing facilities designed to handle? How much needs to be stored temporarily until it can be loaded. Disrupt that flow, and you disrupt the entire industry. The blockade works the output end of the flow, keeping oil from being loaded on tankers and exported. There is only so much storage for that oil and that storage is filling up to the point where Iran will start having to shut in the production wells. The claim, which I believe to be false, is that will destroy the oil fields because a shut-in well can’t be restarted. Step back a bit. There are generally only four things out of an oil well – crude which is a mix of all molecule lengths from CH4 to paraffins, natural gas (CH4), water and biologicals. When you shut in a well, depending on the depth and heat, the longer length molecules precipitate out of solution, forming plugs. Depending on the reservoir, you also have sand in solution falling out, creating a plug. Those wells that need extraordinary help to pump the crude out of the ground (gas lift, water lift, heating, etc) are particularly difficult to restart. Anything plugged, sanded in or using some sort of lift technology requires a servicing unit to be hooked up to the well and tools applied. Sometimes the work is relatively easy. A lot of times it isn’t, particularly on wells we haven’t seen since Khomeini and his merry band of mullahs showed up 47 years ago. The Russians, Chinese and perhaps some of the Gulf States may know the wells, but the first two are most certainly not talking. The falsehood is that the wells are dead. But we know where they are. We know that some of them were still producing. What we don’t know is the amount of work necessary to return the shut-in wells to production. What we do know is that the longer the IRGC allows this to continue, the more difficult it will be to resume production at pre-war levels. I hope their nukes were worth it.
3. Starship IFT 12. Looks like the next Starship integrated flight test (IFT 12) will take place a week from Tuesday, May 12, with the launch around 1800 CDT. The flight will attempt to repeat the successful IFT 11 last October. This one is a pretty big deal with all the major components brand new – launch pad, engines, Booster and Ship. They will not attempt to catch either piece this time around, allowing both to soft land in the salt. Should all go well, expect them to attempt a catch in the next test. There are two additional flight stacks under construction. The next one is ready for rollout and testing. The one after that is not far behind as they ramp up to an operational cadence. A week or so ago, SpaceX released an extended video showing the testing and development of Starship Block 3. This was a remarkable video for the aerospace world, where all the mistakes and failures are shown, shown again, and explained. The journey to the first Block 3 flight has not been an easy or clean one including a ruptured Booster during a pressure test and two failed hot engine tests.
4. Powell. Fed Chairman Jerome Powell changed his mind again, announcing he was going to stay on the Federal Reserve Board after his term as Chairman ends May 15. His term on the Board ends Jan 2028. He apparently intends to continue his anti-Trump obstructionism for the next 21 months. Powell has long hidden behind his supposed defense of Fed independence and tradition. The tradition he is flaunting this time around has been in place since 1948, a mere 78 years of an institution in operation since 1913, 113 years ago. Tradition is apparently meaningless as long as it stands in the way of opposing Trump. Trump’s replacement for Powell, Kevin Warsh was voted out of Senate Banking by a party line vote after DoJ dropped their investigation of Powell’s multi-billion dollar rebuild of their DC offices. This action eliminated NC Senator Thom Tillis’ hold on the nomination. Tillis is on to the next Trump nominee to oppose. Powell needs to be careful, as SCOTUS is still considering their opinion in Trump v Cook, where he tried to remove Federal Reserve Governor Lisa Cook for mortgage fraud. That opinion goes poorly for the Fed, and Trump will have two more Federal Reserve slots to fill.
5. Pot. One of Trump’s strengths is the ability to pick up free money, take action that will gain him public and political advantage. A week ago, he signed an order reclassifying marijuana on the Controlled Substance Schedule from a C-1 (high potential for abuse, no currently accepted medical use, lack of accepted safety for use under medical supervision) to a C-3 (low to moderate for physical and psychological dependence, accepted medical uses) drug. The schedule change allows actual medical research into pot, something that has been verboten for nearly a century. It will also allow growers of medical marijuana to participate in the banking and taxation system rather than outside of it. In making this change, Trump, very much not a user of drugs or alcohol, is listening to the tens to hundreds of millions of marijuana users and taking a look. We might find some good things. We might also find that the new, very powerful high THC variants are dangerous, neither question was even possible under the previous classification. Whatever happens, we will have an actual answer rather than another exercise in arm waving.
6. Agent. Powerful tools can create significant, unexpected results. AI is getting sufficiently powerful that you have to be careful. Last week’s story comes out of PocketOS, which was using Anthropic’ s Claude AI tool to modify code for its vehicle rental system. The AI found a token that nobody knew about, issued destructive commands in violation of explicit instructions not to do so, and deleted the entire application and all backups it could find. The carnage took a mere 9 seconds. The AI has a growing track record of violating safeguards, sometimes catastrophically. The business was able to reconstruct the application from a 3-month-old backup held offsite, though restoration took a couple days. I have from time-to-time deleted things I shouldn’t have. Recovery was both embarrassing and painful. AI automates destruction, particularly finding quick ways to do it that you never imagined. Sadly, the pain and recovery are not as automated yet. Final observation. Anthropic continues to be among the worst actors in the AI world (outside of the CCP). Not a surprise given their background as Biden WH AI experts.
7. Billionaire Tax. It is incredibly easy to get onto the class warfare bandwagon. Far more difficult to get off. The problem is that this Cali bandwagon is not aimed at the billionaires. Rather it is aimed directly at you, me and our neighbors. Cali floated a ballot initiative called a “billionaire’s tax”, essentially a wealth tax that would hit anyone with a net worth of $1 billion with a one-time 5% tax. Backers, mainly unions, have enough signatures to place it on the Nov ballot. The initiative claims to target some 200 billionaires remaining in the state. A substantial percentage of those will flee the state once this passes, taking at least another 100,000 jobs along with them. The problem is that it is not a billionaire’s tax. Rather, it targets everyone. This exercise in class warfare echoes the Income Tax, passed via the 16th Amendment in 1913, aimed specifically at millionaires, quickly growing into a system that today touches 70% of all wage earners. The initiative has a provision that allows the legislature to amend it with a 2/3 vote in each house. This allows the legislature to convert the one-time levy into a yearly one without voter approval.
- The tax requires its targets to list all assets and value those assets. Submit the list to the California Franchise Tax Board
- The Tax Board it authorized to appraise your assets and confirm the value of each
- You pay a penalty of up to 40% of your tax bill if the board determines your reported value was too low
- Finally, the tax board is allowed to subpoena your financial records from your financial institutions for auditing
The initiative runs 34 pages of shifty language all explaining how Cali is going to take your assets. Expect this to destroy the middle class, particularly the lower middle class in a starter home, who will have to sell simply to pay their tax bills and fines. Voters are expected to pass this because they currently hate Silicon Valley. The democrats and unions are using that hatred to install a regime that targets the rest of the Kulaks remaining in the state. When this passes, they will complete their transition into a feudal state, where there are only royalty and serfs.
More later –
- AG