Dow Clings To Longest Win Streak In 8 Months; Dollar & Bond Yields Rise

Just when you thought the China trade-war was easing…

 

The Dow is up 8 days in a row – longest streak in 8 months…BUT look where the Dow stalled today – at its 50% retrace from the Feb tumble…

 

Russell 2000 ripped up to test its all-time closing high (1615.52), then tumbled back into the red…

And a weak close spoiled the party….

 

Wondering what sparked the selling at the close? Simple…

VIX bounced after pushing down to a 12 handle…

 

Tech stocks led the way early helped by NXP’s surge after hope that Trump’s backing down on ZTE opened the door for QCOM’s acquisition…

 

FANG pumped and dumped for the 3rd day in a row…

 

Treasury yields were marginally higher on the day…(chatter of a lot of IG issuance suggested that rate-locks were responsible for some of the rise in yields)…

 

10Y remains below 3.00%…

 

The Dollar Index traded in a very narrow band all day, slightly lower overnight and then gaining strength through the US session and rising a little after Wilbur Ross comments in the afternoon…

 

Meanwhile, Argentina’s Peso crashed again…holding at 25.00 where BCRA said it would buy $5bn in pesos.

And its default risk exploded higher…as its Century bond yields hit a record high at 8.45.

 

But we note that EM FX Carry broke its uptrend…

As Nedbank noted, the carry index is an important “canary” to monitor. The index has broken out of the bull trend at 260 and has rallied from the 255 neckline on Friday to test 260 from below. The next few days will be important, as a consolidation below 260 would confirm a major reversal. A break below the neckline at 255 and below the wave-A high at 252 would project substantial downside (to below the (red) wave-C low of early 2016). The MACD has also confirmed the break out of the bull trend.

Additionally, EM bond yields are spiking…(Dollar and local currency debt costs are soaring)

 

As Blockchain Week starts, crypto was bid today with Litecoin best since Friday’s close…

 

WTI managed to hold on to gains despite the dollar strength but PMs and copper slipped during the US day session…

 

Finally, the market seems to have forgotten about risk again…

The Bank of America Merrill Lynch GFSI Market Risk indicator, which hasn’t posted a weekly gain since March and fell to its lowest level since Jan. 22, is at a point indicating there is less stress than normal.

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Melania Trump Hospitalized For “Benign Kidney Condition” As Harry Reid Undergoes Pancreatic Cancer Surgery

First Lady Melania Trump is in the hospital after she underwent a successful “embolization procedure to treat a benign kidney condition,” according to a statement by her office. 

“This morning, First Lady Melania Trump underwent an embolization procedure to treat a benign kidney condition. The procedure was successful and there were no complications,” reads the statement. “Mrs. Trump is at Walter Reed National Military Medical Center and will likely remain there for the duration of the week. The First Lady looks forward to a full recovery so she can continue her work on behalf of children everywhere.” 

Meanwhile, former Senate Majority Leader Harry Reid (D-NV) underwent surgery for pancreatic cancer on Monday morning at Johns Hopkins Hospital in Baltimore, where doctors removed a tumor according to a statement from Reid’s family.

“Today, Former Democratic Leader Harry Reid underwent surgery at Johns Hokins Cancer Center to remove a tumor from his pancreas,” the statement reads. “His doctors caught the problem early during a routine screening and his surgeons are confident that the surgery was a success and tha tthe prognosis for his recovery is good.”

Reid, a Senator for 30 years, retired last year after announcing that he would not run for reelection, and has kept his diagnosis “very quiet” according to KLAS-TV journalist George Knapp. 

He will undergo chemotherapy for the next phase of his treatment, according to the statement.  

Senator Chuck Schumer (D-NY) says he has spoken with Reid’s family and that the operation “went well.” 

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Sacramento Wants to Boost Rail Ridership By Banning Drive-Throughs and Gas Stations Near Transit

Faced with falling ridership, American cities have been experimenting with increasingly desperate measures to get people back onto buses and trains.

New York, which saw subway ridership plunge by 30 million trips from 2016 to 2017, is cracking down on transit’s competition, with politicians pondering a cap on the number of rideshare vehicles allowed in the city and a mandatory floor for Uber and Lyft prices. Los Angeles, where transit use is stubbornly stuck at about 5 percent of all trips, is spending billions to build out its light rail network and cluster more development around transit stops. Washington is investing in flashy marketing campaigns and a new merch shop to reverse its Metro system’s near 20 percent decline in ridership since 2012.

But Sacramento has the most creative approach. Absurd, but creative. City staff there are drafting an ordinance that would ban building new gas stations, drive-throughs, and other auto-related businesses within a quarter mile of any of the city’s 23 light rail stations. (Also to be prohibited, for reasons unclear: marijuana cultivation sites.) Other businesses “not considered transit-supportive”—car lots, auto repair businesses, manufacturing sites, wholesale outlets—would still be allowed, but only if the city grants them a special permit.

Preexisting businesses would be grandfathered in.

Though the plan is still in the early stages, the Sacramento Bee reports that it has already attracted support from some city councilmen and from the Sacramento Regional Transit (SacRT), which operates the city’s buses and light rail network. “I’m encouraged that this will attract new riders,” SacRT head Henry Li tells the Bee.

How exactly this is supposed to attract new riders is a bit of a mystery.

Would a motorist really decide to switch to transit if using a drive-through window is not an option, or would he instead just patronize a different fast-food joint that’s further away from a light rail station? Would someone really leave her car at home because she can’t gas up near a transit stop that she isn’t using already?

If anything, this seems like it would further deter light rail by inconveniencing people whose commutes involve a mix of transit and driving. It’s fair to assume that fewer people will use the 16 park-and-rides located at Sacramento’s light rail stations if they can’t get gas or food anywhere nearby.

The way city planners explain it, booting businesses that cater to motorists will open up room for new development that will better serve riders, thus boosting ridership.

“You wouldn’t ride light rail to a gas station, but you would ride it to buy groceries, get a haircut or have a meal,” city planner Jim McDonald tells the Bee.

Yet the businesses targeted by this ordinance can and do cater to both transit-takers and motorists alike. After all, restaurants with drive-through windows typically have dining rooms too. And plenty of gas stations make money selling not just low-margin gas but soda, snacks, and cigarettes.

Surely some businesses would think twice about locating near light rail if they knew that their access to customers who drive will be curtailed. Serving a transit-only crowd probably doesn’t sound very enticing right now, given that the number of people using Sacramento’s transit system has been spiraling downward for years. In 2017 alone, ridership declined by about 10 percent.

That reflects a larger trend. In fiscal year 2009, the city’s two light rail lines serviced an average of 58,000 riders every weekday. By the end of fiscal year 2016, that number had fallen to about 44,600 weekday riders, even though the city had opened a whole new light rail line during that time. According to a study by the Cato Institute’s Randal O’Toole, less than 3 percent of commutes are taken via transit in the Sacramento urban area.

Transportation works best when people can make real choices about what mode of travel works best for them, and when businesses can dynamically respond to those choices. Policy makers’ role should be to facilitate these choices, not to try to reverse them—and especially not with a measure as hamfisted as this one.

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Ron Paul Explains Trump’s Plan For Iran: Put Terrorists In Charge

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Back in the 2008 presidential race, I explained to then-candidate Rudy Giuliani the concept of “blowback.” Years of US meddling and military occupation of parts of the Middle East motivated a group of terrorists to carry out attacks against the United States on 9/11. They didn’t do it because we are so rich and so free, as the neocons would have us believe. They came over here because we had been killing Muslims “over there” for decades.

How do we know this? Well, they told us. Osama bin Laden made it clear why al-Qaeda sought to attack the US. They didn’t like the US taking sides in the Israel-Palestine conflict and they didn’t like US troops on their holy land.

Why believe a terrorist, some responded. As I explained to Giuliani ten years ago, the concept of “blowback” is well-known in the US intelligence community and particularly by the CIA.

Unfortunately, it is clear that Giuliani never really understood what I was trying to tell him. Like the rest of the neocons, he either doesn’t get it or doesn’t want to get it. In a recent speech to the MeK – a violent Islamist-Marxist cult that spent two decades on the US terror watch list – Giuliani promised that the Trump Administration had made “regime change” a priority for Iran. He even told the members of that organization – an organization that has killed dozens of Americans – that Trump would put them in charge of Iran!

Giuliani shares with numerous other neocons like John Bolton a strong relationship with this group. In fact, both Giuliani and Bolton have been on the payroll of the MeK and have received tens of thousands of dollars to speak to their followers. This is another example of how foreign lobbies and special interest groups maintain an iron grip on our foreign policy.

Does anyone really think Iran will be better off if Trump puts a bunch of “former” terrorists in charge of the country? How did that work in Libya?

It’s easy to dismiss the bombastic Giuliani as he speaks to his financial benefactors in the MeK. Unfortunately, however, Giuliani’s claims were confirmed late last week, when the Washington Free Beacon published a three-page policy paper being circulated among National Security Council officials containing plans to spark regime change in Iran.

The paper suggests that the US focus on Iran’s many ethnic minority groups to spark unrest and an eventual overthrow of the government. This is virtually the same road map that the US has followed in Iraq, Libya, Syria, and so on. The results have been unmitigated disaster after disaster.

Unleashing terrorists on Iran to overthrow its government is not only illegal and immoral: it’s also incredibly stupid. We know from 9/11 that blowback is real, even if Giuliani and the neocons refuse to understand it. Iran does not threaten the United States. Unlike Washington’s Arab allies in the region, Iran actually holds reasonably democratic elections and has a Western-oriented, educated, and very young population.

Why not open up to Iran with massive amounts of trade and other contacts? Does anyone (except for the neocons) really believe it is better to unleash terrorists on a population than to engage them in trade and travel? We need to worry about blowback from President Trump’s fully-neoconized Middle East policy! That’s the real threat!

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Harvard Endowment Goes All In Apple, Microsoft And Google

One year ago, the Harvard University endowment made news when it disclosed in its 13F filing, that its biggest publicly traded holding was a junk bond ETF, an indication of not only the recent infatuation with high yield bonds (which this year has proven to be all too dear to those who are still long junk) but also of the creeping shift to passive investments as the school replaced some of its own traders with external money managers.

That was the case until the fourth quarter, when Harvard’s latest $855MM position in HYG was dissolved, and in the fourth quarter, Harvard reported only $114.2 million in long equity exposure for 13F purposes, a steep drop from the $1.02 billion in holdings in Q3 2017.

Then late on Friday, the Harvard endowment reported its latest 13F, in which it had another surprise: of its $817 million in long positions as of March 31, 2018, the vast majority, or 72% to be precise, was just three stocks: Apple (35%), Microsoft (21%) and Alphabet (16%), with the remaining positions – mostly ETFs – accounting for just 28% of Harvard Endowment’s long equity positions.

Specifically, the Harvard Management Company bought 1.69 million of AAPL. 1.85 million shares of MSFT and 129,000 of GOOGL, the latest 13F revealed.

And while these investments are just a drop in the bucket for the entire Harvard Endowment, which amounted to $37.1 billion most recently, the sheer determination by the “smartest university in the room” to have FAANG exposure, or at least AMG, at any cost, explains the relentless rise in the tech sector, which continues to hit all time highs not so much on its own fundamental merits, but because everyone – from the Swiss National Bank to Harvard – is piling their cash into just this handful of stocks.

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Is Trump Just Doing the Crazy Things Republicans Always Promised?: Podcast

||| CARLOS BARRIA/REUTERS/NewscomAs Elizabeth Nolan Brown noted this morning, the Trump administration officially opened the new U.S. embassy to Israel today in Jerusalem, amid the horrific gunning down of scores of Palestinians by Israeli soldiers at the border in Gaza. “Like Lucy and the football,” Washington Post fact-checker Glenn Kessler had written back in 2012, “the pledge to move the U.S. Embassy to Jerusalem is a campaign promise that is never fulfilled.” But that was before the rise of Donald Trump.

On today’s Reason Podcast, Katherine Mangu-Ward, Nick Gillespie, Peter Suderman and yours truly drill down into policy areas where Trump has actually gone through with some of the insincere promises Republicans have long made to their voters, starting with the harsh policy announced last week to use family separation—ripping children from their parents—as a conscious deterrent to illegal immigration and in-person asylum applications. Other subjects covered include the Gina Haspel confirmation process, the re-litigation of torture, Trump’s attempted tamping down of drug prices, and some apologetics for pre-2008 Reason headlines.

Audio production by Ian Keyser.

Relevant links from the show:

Trump Calls the Congressional GOP’s Bluff,” by Matt Welch

Trump’s Official Policy: If You Cross the Border, We’ll Kidnap Your Children,” by Jacob Sullum

Undocumented Immigrants Make America Safer,” by Steve Chapman

Do Family Values Stop at the Rio Grande for Conservatives?” by Shikha Dalmia

Trump’s Tribal Immigration Policies Hit a Wall of Facts,” by A. Barton Hinkle

Gina Haspel, Susan Collins, and the Folly of the ‘Good Soldier’ Defense of Torture,” by Eric Boehm

Gina Haspel’s Confirmation Hearing Is a Reckoning for America’s Use of Torture During the War on Terror,” by Eric Boehm

Under Trump, Republicans Have Become the Party of No Ideas,” by Peter Suderman

President Trump: Competition Is the Solution to High Drug Prices,” by Ronald Bailey

‘All Gov’t Support of Higher Ed Should Be Abolished’: Live Debate in NYC, 5/14,” by Nick Gillespie

Reason at FEEcon 2018, June 7-9 in Atlanta!” by Nick Gillespie

Subscribe, rate, and review our podcast at iTunes. Listen at SoundCloud below:

Don’t miss a single Reason Podcast! (Archive here.)

Subscribe at iTunes.

Follow us at SoundCloud.

Subscribe at YouTube.

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Mueller Indicted A Russian Company That Didn’t Even Exist, Court Transcripts Say

Authored by Ryan Saavedra via The Daily Wire,

This week, one of the Russian companies accused by Special Counsel Robert Mueller of funding a conspiracy to meddle in the 2016 U.S. presidential election was revealed in court to not have existed during the time period alleged by Mueller’s team of prosecutors, according to a lawyer representing the defendant.

U.S. Magistrate Judge G. Michael Harvey asked Eric Dubelier, one of two lawyers representing the accused Russian company, Concord Management and Consulting LLC, if he was representing a third company listed in Mueller’s indictment.

“What about Concord Catering?” Harvey asked Dubelier.

“The government makes an allegation that there’s some association. I don’t mean for you to – do you represent them, or not, today? And are we arraigning them as well?”

“We’re not,” Dubelier responded.

“And the reason for that, Your Honor, is I think we’re dealing with a situation of the government having indicted the proverbial ham sandwich.”

“That company didn’t exist as a legal entity during the time period alleged by the government,” Dubelier continued.

“If at some later time they show me that it did exist, we would probably represent them. But for purposes of today, no, we do not.”

The term “indict a ham sandwich” is believed to have originated from a 1985 report in the New York Daily News when New York Chief Judge Sol Wachtler told the news publication that government prosecutors have so much influence over grand juries that they could get them to “indict a ham sandwich.”

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Australia Attempts to Fight Tobacco Black Markets by Banning Large Cash Transactions

Australian MoneyAustralia’s government plans to fight the country’s tobacco black market by banning cash payments of more than $10,000 in Australian dollars—the equivalent of about $7,500 in the United States.

What this actually do is create a new black market for money exchanges while screwing over any law-abiding citizens who want to engage in large cash transactions for any number of perfectly normal reasons.

This is all about revenue, of course. Australia has the highest cigarettes taxes in the world. As in New York City—which has the highest cigarette prices in the United States, mostly due to taxes—the results are a massive black market and organized crime. More importantly, as far as the Australian government is concerned, it’s not getting its money. Officials hope the ban on big cash payments will bring in an additional $3 billion a year.

This estimate assumes the smugglers and other black marketeers won’t simply change the way they do their cash transactions, or turn to cybercurrencies, or, you know, just not comply with this law either. Obviously this new regulation will not prompt a lot of lawbreakers to suddenly toss aside a lucrative lifestyle. It will probably just be another criminal charge and a somewhat tougher sentence for those who get caught.

But an ineptly crafted hammer like this is going to have some significant side effects on people who are completely law-abiding. The law doesn’t care if your cash transaction is to purchase something perfectly legal or not. And as Matt Novak notes at Gizmodo, more than a third of all commercial transactions in Australia are in cash.

At the Australian news site news.com.au, the owner of a Sydney-based security company that collects and moves cash worries that this new law will decimate his business:

“It’s going to screw me—95 per cent of my business is cash collections,” [Paul] Thomas said. “On a monthly basis, we could process and move up to $4-5 million—either picking up cash, processing and EFT-ing it to customers’ accounts, or recarrying it from customers to their bank branch.”

The 40-year-old said he had around 50 to 60 customers, nearly half of which were car yards. “All of my customers are legit operators, high-end car yards, money transfer depot stations,” he said.

Mr. Thomas says the $10,000 limit will cause some businesses to stop accepting cash altogether, eliminating the need for armoured vans and security guards, with courier companies able to transport paperwork to banks.

Comically, the authors of Australia’s new cash transaction limit respond by pointing to countries in Europe that have done the same. Among the examples are countries like Italy and Greece.

Greece and Italy have the largest shadow economies in the European Union. About a fifth of all economic activity in Greece takes place off the books. America can’t even compare: Only about five percent of our estimated economy activity is not declared for taxes.

Greece and Italy are not models for fighting black markets. Greece and Italy are failing miserably. Australia should examine the countries that are trying to crack down on cash use, and recognize that this often backfires miserably.

India tried to go after its black market by rendering some of its legal tender null and void, requiring citizens to swap out their cash holdings for new money—and answer probing government questions about where the money came from. While the stated intent was to go after wealthy tax dodgers, the reality ended up hurting the poor much more. Hundreds of millions of poor Indian citizens don’t have bank accounts and had their lives upturned trying to swap their suddenly worthless currency into something they could spend.

As Reason‘s Shikha Dalmia noted, India’s prime minister was ignoring the roots of the black market problem: The country’s tax rate is too high, and corrupt bureaucrats rule via bribes.

Australia’s black market for tobacco is easily and obviously tied to its massive tax rate. Cigarettes cost $30 a pack there! Yet the government claims that once it cracks down and gets all those missing billions in revenue, it’ll be able to lower taxes. They just need to spend an additional $318 million first to create a brand new task force to go after the black market.

That won’t work. The government needs to deal with the root cause of its black market: itself. The state has forced prices of tobacco so high that people are resorting to illicit means to get their hands on the stuff. Violating the privacy of all Australian citizens—demanding that they engage in financial transactions the way you want them to—will not do anything to fix this problem.

Australia is far from the only government fighting black markets in dumb ways. When California legalized recreational marijuana, it did so with a massive tax scheme. As a result, the state’s black market in marijuana isn’t actually going away. Rather than realizing that his tax and licensing schemes are too onerous, Gov. Jerry Brown just proposed spending $14 million to create new task forces to fight this new variation on the marijuana black market.

Bonus link: William J. Luther explains why it’s a bad idea (and a violation of citizen privacy) for governments to try to eliminate cash transactions.

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In Jab At Facebook, Google; Tim Cook Tells Duke Grads “Technology Shouldn’t Mean Trading Away Your Privacy”

While Apple’s latest quarterly earnings report has undoubtedly alleviated some of the pressure facing CEO Tim Cook as more analysts begin to question the company’s decision to bank on a $1,000 smart phone, Steve Jobs’ anointed successor hasn’t entirely abandoned the art of deflection.

Indeed, Cook pulled off an almost Muskian deflection over the weekend when he delivered an oblique jab at his two biggest Silicon Valley rivals – Facebook and Google – over lingering concerns about data privacy practices among American tech firms.

During a commencement speech at his alma mater, Duke University, Cook warned a crowd of wide-eyed graduates about a potential pitfall that isn’t part of the tried-and-true commencement speech formula: The importance of protecting user data from those who might exploit it.

Of course, that doesn’t mean Cook’s speech wasn’t chock-full of the usual Silicon Valley virtue signaling. Cook applauded the Parkland students and the #MeToo movement for challenging the status quo – that most Valleyesque of virtues – and urged graduates to follow their example during a speech that was stuffed with platitudes about embracing uncertainty, being “fearless” and the importance of overcoming inertia to change the world for the better. It also featured at least one choice JFK quote.

But it was his remarks about Apple’s efforts to ethically steward sensitive data belonging to its customers that drew the most attention.

“We reject the notion that getting the most out of technology means trading away your right to privacy, so we choose a different path: collecting as little of your data as possible, and being thoughtful and respectful when it’s in our care. Because we know it belongs to you,” Cook said in his address at Duke University in Durham, North Carolina.

Cook was one of the first tech executives to disparage Facebook CEO Mark Zuckerberg in the wake of the Cambridge Analytica data-privacy scandal. When asked by Recode’s Kara Swisher how he’d handle this type of a controversy at Apple, Cook replied that he “wouldn’t be in this situation.” He has also famously referred to data privacy as a human right.

Watch the full interview below:

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The ‘Intellectual Dark Web’ Is Just Rehashing Old P.C. Controversies in New Media

They can be found gracing high-profile cable-news shows, magazine opinion pages, and college speaking tours. They’ve racked up hundreds of thousands of followers. And yet the ragtag band of academics, journalists, and political pundits that make up the “Intellectual Dark Web” (IDW)—think of it as an Island of Misfit Ideologues—declare themselves, Trump-like, to be underdogs and outsiders.

Mathematician Eric Weinstein, managing director of Thiel Capital, coined the term Intellectual Dark Web some while back, but it only became a subject of mass controversy after Bari Weiss published a recent New York Times profile of the crew. Weiss lumps Weinstein, his evolutionary biologist brother Bret, and about a dozen other high-profile, often controversial folks in the IDW ranks, including “New Atheism” guru Sam Harris, American Enterprise Institute scholar Christina Hoff Sommers, comedian Dave Rubin, conservative pundit Ben Shapiro, author and academic Jordan Peterson, and Quillette founder Claire Lehmann.

A diverse group in terms of work backgrounds and political leanings, what they share is a disdain for modern center-left orthodoxies—and a view of themselves as victims of unfortunate and intensifying forces: identity politics, feminist militancy, transgender activism, illiberalism around speech.

“A decade ago, they argue, when Donald Trump was still hosting The Apprentice, none of [their observations] would have been considered taboo,” Weiss writes. They don’t see this as a product of failing to keep up with cultural tastes, new research insights, or shifting ideas about identity but a sign of “political correctness” bordering on hysteria in mainstream media and academia, a confirmation that the “truths” they speak are more reviled—and necessary—than ever.

The IDW view of their evolving position seems, at minimum, like a selective remembering of recent history. Figures like Harris and Sommers have been controversial for most of their careers, and certainly no one was rolling out the mainstream political welcome wagon for them a decade ago. If anything, both are less fringy figures now than they were 10 years ago.

The last decade was also littered with battles about evolutionary biology and psychology, debates that built on gender wars started decades earlier. Just how physiologically different males and females are and how much this matters has long been a subject of intense and fraught debate; it is not some newfangled concern that millennial SJWs have suddenly seized. Similarly, partisans have been debating political correctness on college campuses for decades.

I don’t buy the notion that IDW ideas are only now becoming beyond the pale. Nor am I convinced that they’re actually so taboo these days.

As Weiss points out, this is a crowd that has built followings on new-media platforms like YouTube and Twitter rather than relying solely on legacy media, academic publishing, and other traditional routes to getting opinions heard. (There isn’t much that’s new about this except the media involved. Conservatives have long been building large audiences using outside-the-elite-media platforms such as talk radio, speaking tours, and blogs.) In doing so, they’ve amassed tens and sometimes hundreds of thousands of followers. What they are saying might not be embraced, or even endured, by legacy media institutions or certain social media precincts, but it’s certainly not out of tune with or heretical to many Americans.

The bottom line is there’s no denying most of these people are very popular. Yet one of the few unifying threads among them is a feeling or posture of being marginalized, too taboo for liberal millennial snowflakes and the folks who cater to them. “The I.D.W. emerged as a response to a world where perfectly reasonable intellectuals were being regularly mislabeled by activists, institutions and mainstream journalists,” Eric Weinstein told the Times.

The other thing the IDW crowd seems to share is their response to this perception.

Presenting themselves as brave and imperiled truth sayers facing down an increasingly “politically correct” populace, they offer their fans an immensely appealing proposition: It’s not you, it’s them, and liking us is a sign that you are not like them. We are rational, radical where it’s called for, able to take a joke, and part of America’s great intellectual tradition—everything the speech-policing, biology-denying left is not. And anything we say or share that angers the left is just proof of how insane they have become.

There are indeed a lot of loony people on the left, as there are in most ideological spheres. And college kids have indeed mounted some passionately stupid crusades in the past few years. Pushing back against these people, exposing their hypocrisies, and riling up outrage over their antics is sometimes necessary and often fun. It is always good for garnering attention. But it is also easy—and it is not enough.

The only way to produce lasting change is to use less shock and shame, more showing people on their terms why your way forward can help. It requires the empathy that allows for projecting the best intentions on your enemies, the patience to actually strive for common ground or conversion instead of simply writing people off as hopeless dummies, the ability to shed your ego enough not to need to “own” those who disagree with you, and the confidence to call out any entity—especially among one’s “side” or allies—that stands athwart your version of good.

As a political and ideological minority, libertarians have long had to learn these skills to make any headway. We end up in a lot of coalitions with a lot of fair-weather friends. We know perhaps better than anyone else that there are authoritarians on both the right and the left who want to use state power to impose their versions of good and right on the rest of us; that for all they dress up this impulse in talk of religion or tolerance or tradition or anti-P.C., the bulk of both sides would sooner their side “win” than promote policies where someone, anywhere, isn’t following their preferred rules; and that most people want easily categorizable heroes and villains, not to rethink any fundamental assumptions while thumbing through Twitter. That’s precisely why this Intellectual Dark Web crowd is so perfectly tailored to these times: Their type of hereticism doesn’t require much.

Blanket proclamations about those labeled IDW are of couse tricky, since the group is not only diverse in political affiliations and areas of expertise but also riddled with outliers. Quillette‘s Lehmann stands out as less inflammatory and condescending than others. Bret Weinstein also seems more willing than most IDWers to offer olive branches and exhibit a capacity for basic kindness. Lehmann, Weinstein, and a few others Weiss names (including author and academic Alice Dreger, who explains why she declined to be included in the New York Times article here) at least come across as more interested in truth and discourse than and glory. On the other end of the tone spectrum, we have folks like Peterson, Rubin, and Shapiro, whose public personas are built around being deliberately provocative.

“Israelis like to build,” reads one now-deleted Ben Shapiro tweet. “Arabs like to bomb crap and live in open sewage.” Shapiro is also fond of pointing out on the regular that he thinks trans people shouldn’t have the right to self-determination.

Peterson, a psychology professor at the University of Toronto, skyrocketed to international renown for refusing to address transgender students by their preferred pronouns. His YouTube videos and recently published self-help book are full of sensible advice—interspersed with wisdom about how all feminists have “an unconscious wish for brutal male domination,” rants against postmodernism (which has reached almost mythical megavillain status in Peterson’s worldview), threats to hit other academics, and goofy parables about lobsters.

Basically, Peterson is like the ideological equivalent of a fad diet: The basic advice is sound—and it may even help you reach your goals—but you could skip the more esoteric elements, like eating for your bloodtype or believing that wearing lipstick in the workplace is asking to be sexually harassed, and wind up in the same place.

Rubin regularly makes absurdly reductionist statements about various groups he opposes (“The leftist media hates gamers” because “they don’t like people who solve problems”), relies on bastardized evo-psych to make his points (today’s gender norms are good because they’ve “existed from our hunter-gather days”), and makes videos that instruct people on how to “trigger” progressives.

The “red meat” for IDW fans is undeniably tales of liberal lunacy and P.C. culture run amok. This is what unites the Republicans and Democrats, feminists and conservatives, etc., in their worlds. It’s this, not tempered critiques and not substantive analysis, that leads to views, clicks, retweets, likes, fans, followers, and speaking invites.

There’s nothing innately wrong with playing to what the crowd wants—all of us in media make that calculation in a hundred ways each week. But when “the reward structure is for precisely when you are out there transgressing” and engaging in taboo subjects, “it’s hard not to become corrupted…in that process,” as Matt Welch commented last week. When your fan base is predicated largely on serving up quickly digestible, dopamine-triggering outrage day after day, week after week, it’s very easy to lose perspective, to pander to their (and your own) worst impulses, and to wind up engaging with only the most ridiculous of the other side’s arguments. To spend less and less time on the things you want to change and more and more on how stupid the things that other people want to change are.

It is not a career model that encourages nuance, niceness, or introspection. This is also fine; plenty of people make media careers peddling what the market wants, not trying to reveal injustices, speak radical truths, or change the world. Where some of the IDW crowd can become insufferable is doing the former while insisting it’s doing the latter.

Another annoying (and unproductive) tick I’ve found in my personal dealings with and observations of IDW types is their insistance on drawing strict lines around themselves and The Other Side that are based more on aesthetics than shared policy platforms. Criticize a racist joke (without calling for it to be censored)? You must be part of the regressive left! Think mainstream feminism is often misguided but probably not a “cancer”? SJW! Never mind if you’re every bit the First Amendment absolutist that IDWers claim to be; a refusal to pantomime the right hate will get you booted from IDW esteem right quick.

It’s a tribalistic tendency totally at odds with their professed reverence for individualism and hatred of “identity politics.” It mars the best messages and tendencies of IDWs—respect for free speech, rejection of over-the-top wokeness, skepticism toward bureaucracies and big government—by framing support for these things as conditional on sharing other, more controversial IDW calling cards. Ultimately, this leaves as little room for winning new converts and starting new coalitions as with their scolding, screeching progressive counterparts.

The supposed ostracism they suffer because of their views ultimately comes down to a complaint not about censorship or exclusion but being attacked, challenged, or denied very particular opportunities. They want to say the things they are saying and have the marketplace of ideas and attention not only reward them with followers and freelance writing gigs but universal acceptance from those that matter in the academy and chattering classes.

They want not so much any particular policy platform, political idea, or candidate to catch on as for more people to acknowledge that they are right. And that will always be a proposition that winds up making one feel aggrieved, because it’s an impossible one. To the extent that they are spouting marginalized or unpopular ideas, the only way to spread these into the mainstream is to put in the hard work of winning people over.

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