Stop Exporting Jobs....to Texas

GAF shingles

We first became aware of solar shingles (not solar panels) when we visited a Tesla showroom in 2017.

Tesla’s basic premise is to make solar ownership more attractive and affordable by eliminating the need to install both a roof and solar panels. Tesla says it will manage the entire process of solar roof installation, including removal of existing roofs, design, permits, installation, and maintenance. The company estimates that each installation will take about a week.

We will seriously consider installing solar shingles when it comes time to replace our 30-year-old roof. Tesla isn't the only vendor, of course, which is why it's disappointing that one of its competitors is moving its headquarters from San Jose to Texas.

GAF Energy, which sells solar panels embedded in roof shingles, will shut down its San Jose headquarters on Dec. 13, it announced in a Thursday WARN document, filed with California officials. The company uses the facility for researching, developing and manufacturing its solar shingles — a whole green energy factory at San Jose’s southeastern corner, operational since 2021. But now, GAF Energy will lay off local workers and shift its official headquarters to Georgetown, Texas...

Compared with California, Texas is building housing at a rapid rate, potentially making the state a more appealing market for a solar provider like GAF Energy that aims to grab customers as they’re adding or replacing a roof. A Realtor.com report from February — published alongside that company’s move to Texas — said the Lone Star State accounted for 15% of the country’s new house permits in 2024.

California's exodus of large companies (Tesla, Oracle, HP) gets the publicity, but the loss of hundreds of smaller businesses is damaging, especially since smaller companies are the engines of future growth.

It's discouraging that we will have to buy a newish technology from a company in Texas instead of from the state that invented it.

London: What's Going On?

The news feed is filled with stories about the decline of London and the UK in general. If reports are to be believed, hordes of unassimilated migrants go unpunished for rape, murder, and other mayhem while armed police arrest comedians for tweets and residents for waving the Union Jack. Violence against Jews is causing Jewish citizens to emigrate from the U.K. If Britain is collapsing, what are we to make of this?

London: new towers springing next to the old (Zuma/WSJ)

Apple and Citadel Fuel London Office Boom

The office market in London’s ancient commercial quarter—known simply as the City—is booming, fueled by an influx of American law and finance firms, a growing tech scene and demand for the swankiest spaces to lure workers back to their desks.

The boom shows Britain’s finance industry has defied fears of a post-Brexit exodus. Despite losing some business and financiers after the U.K. left the European Union, London still hosts by far the biggest banking and capital markets in Europe.

The buoyant market also reflects the district’s broadening appeal. For decades the area was a bastion of finance and insurance. Now tech companies—including Apple, TikTok and several thousand smaller firms—vie for space, drawn in part by the prospect of easy access to potential investors.

“London, as a location for international businesses, seems to have really proven its resilience,” said Martin Towns, who runs M&G’s $43 billion real-estate business. “The City has a renewed level of vibrancy.”

Finance companies and Big Tech are not known for taking extraordinary risks, so what's going on with the $billions pouring into London? As an Anglophile, I hope that fears of its death have been greatly exaggerated.

WSJ: Stanford is #1

Rodin's Burghers of Calais in Memorial Court, Stanford

Many years ago I was accepted to Stanford's undergraduate program but didn't go. Though grateful for how everything worked out, I do feel a twinge of road-not-taken regret when I see yet another article extolling the glories of the Farm:

Stanford University tops the list of the best U.S. colleges in the latest WSJ/College Pulse rankings.

Unlike other school rankings, this list emphasizes one point: How well did the college prepare students for financial success? More than any other factor, it rewards the boost an institution provides to its graduates’ salaries, beyond an estimate of what they could have expected from attending any college.

Stanford returns to the top of this list for the first time since the 2017 rankings. Ivy League schools also figure prominently, with Yale University, Princeton University and Harvard University finishing third, fourth and fifth, respectively. Two other Ivy League schools—Columbia University and the University of Pennsylvania—come in at eighth and ninth, respectively.

Beyond the marquee names, the rankings’ distinct methodology highlights some institutions that don’t have as much name recognition but still help their students achieve remarkable success.

Babson College—the small Wellesley, Mass., school focused on business and entrepreneurship—retained its No. 2 spot from last year. Claremont McKenna College, near Los Angeles, clocked in at No. 6, and Davidson College, near Charlotte, N.C., ranked 10th.

The University of California, Berkeley, is the best-ranked public school, at No. 7 overall, and five other public schools from the state cracked the top 25...

The value of Stanford
Stanford scored well across the rankings’ metrics, including a high graduate salary score and a short amount of time to pay off the net price of college.

Raj Palleti, a 2024 Stanford graduate, says his computer-science education at the school has opened doors. While at Stanford, he interned at Nvidia and co-founded an AI startup, alphaXiv, where he is the chief operating officer. The company’s community platform helps researchers accelerate work with AI tools.

Palleti credits Stanford for fueling students’ drive and talents for innovation. “They have so much of an emphasis of like, ‘Oh, you should just build cool things,’ ” he says.

Karuna Taesopapong, a Stanford economics major who graduated in 2024, recalls discussion-focused, hands-on courses. One involved an energy-market simulation, where students had to navigate supply shortages and power outages to maximize profits.

“That’s the reason why you go to Stanford, because you try to get those niche insights and hear about stories that you wouldn’t necessarily get anywhere else,” she says. She now is the growth leader at a startup called Onton, an AI-powered home-decor shopping engine.

Ever since Business School Dean Jonathan Levin became its president, Stanford has been tacking toward the political center, a wise place to be for one of the world's top universities.

Illiquidity + Greed = Disaster

(Table from University Business)

The nation's largest universities have tens of $billions in endowment funds, yet are experiencing a cash squeeze. [bold added]

Over the past couple of decades, no group of investors has piled into what are called alternative assets more eagerly than the endowment funds of major colleges and universities. In their rush to emulate the stellar success of Yale University’s endowment head David Swensen, who died in 2021, educational institutions pulled tens of billions of dollars out of stocks and bonds and poured it into hedge funds, private equity, venture capital and other investments that don’t trade publicly.

The result looks nothing like the portfolio of 60% stocks and 40% bonds that has long been a guidepost for many investors. On average, in fiscal 2024, educational endowments with more than $5 billion in assets held only 2% in cash, 6% in bonds, 8% in U.S. stocks and 16% in international stocks, according to the National Association of College and University Business Officers. That left two-thirds of their total holdings in private funds and other non-traditional assets that can’t readily be turned into cash.

Now you understand the life-or-death panic that seized such elite institutions as Brown, Columbia, Cornell, Harvard, Northwestern and other universities when the Trump administration threatened to cut off their federal funding. Even though their endowments hold billions of dollars, much of that immense wealth might as well be stored on the planet Proxima Centauri b, about 4.2 light years away.

These universities are slashing budgets, freezing their hiring and scrambling to raise money any way they can.

An investment rule that's easy to understand but emotionally difficult to implement is to keep enough liquidity to cover cash needs, even during a down market or a shortfall from a funding source like the Federal government. It's a hoary lesson that one doesn't need an MBA from Harvard, Stanford, or Wharton to follow: greed and pride can be your downfall.

Dressing for Success: Harder than Ever

In the old days a wife took the blame for letting
her husband go out like this (Urban/WSJ)

Wearing a coat and tie during the sweltering days of summer was uncomfortable, but that was the businessman's lot during most of the 20th century.

Being required to wear the "uniform" had its advantages, though: men didn't have to spend a lot of time deciding what to wear. The basic wardrobe consisted of blue, black, and gray suits, blue and white shirts, and black shoes. We expressed individuality through ties.

Today it's much more complicated because there are more combinations that are possible and more ways to go wrong. Also, being classy and casual doesn't come cheap.

P. Johnson Twill Linen Corbu Vest, $490,
Oxford Shirt, $175, Ice Cotton Tee, $245,
and Tony Jeans, $370 (WSJ)

Alternatively, you could dress like a suave guy who just happens to work with money. [Alex] Seo loves classic-but-not-corporate jackets from the Armoury, including the safari styles. Zach Garst, a trendy Houston tax consultant, 28, pairs cotton slacks with “something a little more spicy,” like boxy shirts and cardigans from Auralee and Frizmworks.

For style inspo, Le Alfré founder Brandon Snower recommends @schoonerscorer, an Instagram account popular with finance guys. It features videos of a charismatic Brit—Alex Hendy—rating beers at pubs. He’s stylish but never mentions clothes. After bingeing clips, I can tell you that I won’t be slurping the ho-hum porter at one central London pub, but I do need Hendy’s cream cable-knit sweater and red Ralph Lauren shirt. I like that he’s not a “fashion influencer”—outfit-dissecting accounts often come off cringe—just a cool guy doing his thing.

One menswear account I do enjoy: @the_daily_mirror. Founder Manish Puri, who works in financial services and writes about menswear, radiates unprecious elegance with flowy trousers, suede chore coats—and a cartoon chicken head superimposed over his own.

Another benefit of the old dress code is that business attire could hide a man's defective physique. Now his flaws are accentuated.

I'm glad I'm retired.

Strictly Business is Becoming Nicer

Grand Hyatt at SFO suite: ready for a business meet

In my working days I would sometimes stay at airport hotels. Reasons were specific: only one or two business meetings, no time to tour the host city and/or dine at a nice restaurant, and a tight calendar that necessitated going to the next destination after meetings were over. (Keeping costs down was a factor but not as important as the others.)

One may think that the popularity of video conferencing would have damaged the airport-hotel business model, but one would be wrong:

The Grand Hyatt SFO was charging nearly $500 for a one-night weekday stay in late May.

Luxury hotels inside airports, not to be confused with those clusters of budget-friendly chain hotels a free shuttle ride away, are having a moment. Affluent vacationers and business travelers are splurging before or after a flight in the same way they are paying up for cushier plane seats with more perks.

Hoteliers say they are selling convenience, service and amenities you won’t find in that airport SpringHill Suites or Hampton Inn—bathrobes, craft cocktails and fine dining. And guests are buying.

The 351-room Grand Hyatt SFO, which opened in late 2019, posted its highest monthly occupancy rate (84%) and average daily rate ($362) last fall. It finished the year with significantly better metrics than the overall San Francisco hotel market, according to reports by the airport commission. The hotel and airport are owned by the city.

At the Westin Denver International Airport, also a city-owned hotel, the average daily rate last year rose to $337.39, up 5.3% from 2023 and 15% from 2022, according to the city. Officials say rates have held up through the first five months of this year despite economic uncertainty.

At Dallas Fort Worth International Airport, the 20-year-old Grand Hyatt DFW in July will begin a $34 million makeover that includes new rooms, room renovations and a restaurant and fitness-center overhaul.

One of the joys of non-business travel is the opportunity to walk around the host city. Staying in Waikiki or Union Square for me is vastly preferable to lodging in HNL or SFO, respectively, so the improving economics of airport hotels is likely due to business travel. It does make some logical sense--business people fly less frequently, but when they do everything is first class. However, more analysis is definitely called for.

Leave the Sign, Take the Cannoli

(Photo by Bukaty/AP/WSJ)

The question: is the mural over Leavitt’s Bakery "commercial speech" subject to regulation or is it art that is protected by the First Amendment? [bold added]

[The town of Conway, NH] had argued the mural was a commercial sign and in violation of the town’s zoning law, and told him to take it down or adjust the size, which at 91 square feet was nearly four times larger than allowed. [Leavitt’s Bakery owner Sean] Young fought back, saying the mural was art, not advertising, and that the town infringed on his First Amendment rights by trying to regulate its content. He filed a First Amendment lawsuit against the town and sought $1 in damages.

..The ruling, issued by U.S. District Judge Joseph Laplante, came after a one-day bench trial in February.

Laplante said Conway’s enforcement of the ordinance was unconstitutional, and ordered the town to stop its efforts.

There are sound reasons for the regulation of commercial speech. Businesses could lie about the benefits, costs, or any other aspects of their products and services and skip town to avoid responsibility; such speech should not be protected by the First Amendment.

In the case of Leavitt's Bakery it's not clear why the public needed protection from the mural; calling it a commercial sign seemed like a pretext to force the bakery to remove an image that some in the town didn't like. Cheers for the judge for putting a stop to legal over-reach.

Would You Keep Paul McCartney Waiting?

CNBC's Jim Cramer was bantering with fellow stock market commentator David Faber when Jensen Huang (shown in background) arrived nearly half an hour early for an interview with Cramer.

Jensen Huang and Elon Musk are the rock-starrish two most famous businessmen on the planet (the difference is that they're mobbed by nerdy guys instead of women).

Others who used to hold that lofty position, like Bill Gates and Jeff Bezos, have reduced their roles in the companies that made them centi-billionaires.

It's a sign of Jensen Huang's humility that he patiently waited for Jim Cramer to finish his segment, although Jensen is even busier than normal at this week's Nvidia GTC (GPU Technology Conference) in San Jose.

This blogger's question to Mr. Cramer: would you keep Paul McCartney waiting?

It's Only Abnormal to Some

Pride parade on 6/30/24 (Zimmrman/SFGate)

The SFGate reporter calls it a "very abnormal" development, but to this observer it's not surprising at all. [bold added]

Several longtime corporate sponsors of San Francisco’s Pride celebrations are pulling their funding for the festivities, leaving Pride organizers searching for another way to raise $300,000.

In the past four weeks, multiple companies told San Francisco Pride, the nonprofit behind San Francisco’s annual Pride Parade and Civic Center celebration, that they would not support the 2025 Pride celebrations. In an interview with SFGATE, San Francisco Pride’s executive director, Suzanne Ford, said she was “really disappointed” by the developments.

In their communications with San Francisco Pride, the sponsors all cited a lack of funds. None of them mentioned the political climate. But Ford noted that it was “very abnormal” for several multiyear sponsors to suddenly drop their support for the event...

Ford told KTVU-TV that those sponsors included Comcast; Anheuser-Busch, the company behind Budweiser and Beck’s beer; wine company La Crema; and Diageo, the beverage company that produces Guinness, Smirnoff and other alcoholic drink brands. Aside from Comcast, all of those companies specialize in alcoholic beverages, a market that has become more volatile as Americans’ drinking preferences shift...

San Francisco Pride has budgeted $3.2 million for its events on the weekend of June 28-29, Ford said, and of that sum, corporate sponsorships are meant to cover $2.3 million. The companies that withdrew represented a combined $300,000 in funding.

Earlier this month, Ford announced that San Francisco Pride was ending its relationship with Meta, the parent company of Facebook. The social media giant recently ended its major diversity, equity and inclusion programs and scaled back its content moderation policies. In an interview with KGO-TV, Ford noted that the nonprofit was pausing its relationships with sponsors that don’t align with San Francisco Pride’s values.

One interpretation is that the "political climate" risks harm to sponsors of LGBTQ programs. A different explanation is that businesses are finally free to say "no" to causes that they felt they had to support because of what could happen if they didn't (see Tesla cars and dealerships for examples). I don't wish ill upon Pride and for their sake hope that a trickle doesn''t become a waterfall.

The Chickens are Going Elsewhere to Roost

Intuit HQ in Mountain View (Mercury photo)

Despite economic strength in the rest of the country Bay Area tech layoffs continue. IBM, Cisco, and Advantest announced that a combined 1,000 jobs will be "permanently" eliminated by the end of November.

Added to the 384 positions extinguished at Intuit's Mountain View HQ in July, over 45,000 jobs have been lost in the Bay Area since 2022.

None of the aforementioned companies are in trouble. In fact, all their stocks are trading near the high for the year.

Udemy looks like it was a nice place to work (Chron)

San Francisco-based Udemy is more explicit about the reasons it is cutting Bay Area jobs: [bold added]

Udemy, the world’s largest online learning marketplace, announced plans to lay off 280 employees, representing approximately 20% of its global workforce. The company said it intends to rehire about half of these positions in locations with lower operational costs.

The restructuring is expected to incur costs ranging from $16 million to $19 million, mainly in severance payments, and will span from the third fiscal quarter of 2024 to the first quarter of 2025. Udemy aims to complete the restructuring by March 31.

Udemy is a relatively small company with 1,443 employees at the end of 2023. Earlier this week we posted about how California's inhospitable business environment (taxes, regulatory inefficiencies, anti-business Progressive attitudes) caused Elon Musk to move his multi-billion dollar enterprises to Texas.

California's heavy hand applies to small businesses as well.

The Limits of Competition

(Image from Yale Insights)

During my career I worked for a CEO who thought internal competition was the way to get the most out of workers.

The competition was at its fiercest when it came to devising a new line of business. My team worked round the clock, as did the others, to come up with an idea and the strategy to implement it.

No team "won." We ended up adopting a strategy proposed by a well-known consulting firm.

Internal competition often is counter-productive.

Internal competition often stifles innovation.

That is what we found in a study of companies that pushed internal teams to compete with each other—whether for formal financial rewards like bonuses, or for informal ones like greater prestige, access to executives and influence.

Yes, by some indicators, the teams ended up working harder when they were battling each other. But they failed in another crucial respect: The more teams competed, the less innovative they were. Simply put, they were wary of sharing information with other teams, so they weren’t getting unexpected, inspiring ideas from people in other parts of the company.

In fact, the only teams that excelled in the study were ones that did choose to share information with others, whether out of necessity or strategically.

Competition drives innovation, but it appears not to work if the organization competes internally. [bold added]

How, then, can companies leverage the benefits of competition without sacrificing information sharing between teams?

For one thing, choose an outside target: Instead of making internal teams battle each other, have them try to beat external benchmarks, such as how many patents a rival company produces. Companies should also make efforts to ensure groups share information, such as holding regular meetings or creating a shared database that any team could use.

Competition is one of the foundational elements of capitalism, but it is not the only element. The free flow of information is another, as well as the shared value to seek the good of the whole.

SF: Another Neighborhood Market Closes

(SF Gate photo)

Despite political leaders' assurances that San Francisco is cracking down on crime, homelessness, and drug use, one local business has given up:

After 35 years in business, a family-owned market in South Beach is closing its doors. Co-owner David Pesusic said high operation costs and mounting neighborhood crime were the driving factors.

Bayside Market, located at 120 Brannan St. near the Embarcadero, will cease operations on Sept. 13. Some of its 12 employees will be transferred to RJ’s Market near Fisherman’s Wharf, the business’s other location, but most will be laid off, Pesusic said.

In addition to inflation-fueled bills and declining foot traffic, the small grocery and deli has suffered from “rampant” crime, including near-daily shoplifting and three break-ins in the last couple years, Pesusic said. He blamed city officials for the increased crime, slamming law enforcement and city leaders for being unresponsive and overly permissive...

Law enforcement has taken hours to respond to petty crimes at Bayside, if they respond at all, Pesusic said. During two of the three break-ins the business faced over the past two years, he said police officers took over eight hours to arrive on the scene. And the market’s employees have stopped reporting shoplifting incidents, which Pesusic said occur at least 5-6 times a week, and sometimes up to five times in one day.

Crime in the city plunged in the first quarter of 2024, the Chronicle reported in April. From January through March, San Francisco saw decreases in every major crime category tracked by the FBI for its Uniform Crime Reporting Program, which includes homicide, rape, aggravated assault, robbery, burglary, arson, larceny-theft and motor vehicle theft.

But Pesusic said market employees have stopped reporting many crimes.

“We don’t even call 911 anymore because they don’t respond,” Pesusic said. “This isn’t fun, playing security-slash-police officer, trying to hold on to my inventory.”

In the absence of law enforcement, people deal drugs right outside Bayside’s doors and serial shoplifters operate with no consequences, Pesusic said.

“These guys think our store is a pantry where they can take whatever they want,” Pesusic said. “We’ve been spit at, we’ve had knives pulled on us, we’ve been called names.”

For a City that is hostile to automobile traffic, San Francisco doesn't seem to be helping residents shop, dine, and receive services without forcing them into their cars or using problematic public transportation.

Also...after the Federal jobs report was "revised" down by 818,000 from April, 2023 to May, 2024, I've stopped blindly accepting improvements -- such as San Francisco crime decreases--in government statistical measures without corroboration.

MEI, not DEI

(Image from Diversio/Linkedin)

There's a new Human Resources acronym to learn about: [bold added]

From tech to tractors, companies are dialing back diversity, equity and inclusion efforts. Instead, a DEI alternative endorsed by Elon Musk could alter the fate of your next job application.

It’s known as MEI, short for merit, excellence and intelligence. As described by Scale AI Chief Executive Alexandr Wang, who helped popularize the term, MEI means hiring the best candidates for open roles without considering demographics.

The George Floyd riots of 2020 kickstarted the whole Diversity, Equity, and Inclusion movement, and companies raced to install DEI programs that would diversify their work forces, diversity being typically measured by the number of people they would hire who were not white, straight males.

Four years later the lack of a return--or perhaps even a negative return--on their investment have caused some companies to renounce DEI in favor of merit-based personnel policies.

Your humble blogger finds it important to note that one major organization that wholeheartedly embraces DEI is government, which has few performance metrics and no competition to show whether an alternative might be better.

By the way, expect DEI to be a hot-button topic this election year:

That tension is now in the brightest of spotlights, after President Biden abandoned his re-election bid and endorsed Vice President Kamala Harris. Biden picked Harris as his running mate four years ago, after vowing to consider only women for the job. Almost immediately, some political opponents began painting Harris, who is Black and South Asian, as a “DEI hire.”

Fox News:

Florida Democratic Rep. Maxwell Frost said on Tuesday that calling Vice President Harris, the presumptive Democratic presidential nominee, a "DEI hire" was like using a "racial slur."

The race card has already been played, and there's still over three months to go to the election.

The Working of the Musk Mind: a Materials Science Example

Carbon fiber is stronger and lighter than steel, as even laypeople know from numerous advertisements.

Princeton Professor Adam Burrows asks Elon Musk why SpaceX rocket engines are built with stainless steel instead of carbon fiber. As Elon Musk walks him through the decision, it becomes clear why he chose steel, especially when one considers that safe re-entry and re-usability are primary goals. Below is a nine-minute video from Twitter/X:

If you want a detailed explanation of why I switched Starship from carbon fiber to stainless steel
pic.twitter.com/pXC0ngheiw

— Elon Musk (@elonmusk) June 7, 2024

Perhaps as important as his technical knowledge, experimentation and even acceptance of failure (within reason) are key components of Elon Musk's success.

Elon Musk thought at the outset that SpaceX would probably use carbon fiber. As it tested carbon fiber, stainless steel, and aluminum, it found that steel's strength increased at the extremely cold temperatures (-297.3°F / -182.96°C) necessary to contain the liquid oxygen in the fuel mix. Lining a carbon-fiber engine to secure it against cold is complicated compared to steel, and even if that problem is solved, carbon-fiber would only be as strong as stainless steel.

Steel also held up better than fiber and aluminum at high re-entry temperatures and required a thinner (lower weight) heat shield. The fact that stainless steel is much easier to work with and is much cheaper than other materials are added bonuses.

In most large organizations everyone is afraid of making a mistake that could cost them their jobs. His willingness to fail--and thereby learn--and his power to call the shots are why Elon Musk's companies are far ahead of their competition.

Stanford: A Reconsideration

Cleaning the mess at White Plaza (Chron photo)

Maybe, just maybe, Stanford University has had enough of the extremes of Progressivism, DEI (diversity,equity, and inclusion), and wokeness: [bold added]

Thirteen people were arrested at Stanford University in a protest led by pro-Palestinian students, university officials confirmed Wednesday.

"All arrested students will be immediately suspended and in case any of them are seniors, they will not be allowed to graduate," the university said in an emailed statement.

In the demonstration, students "unlawfully entered" Building 10 where offices for both the president and provost are located, according to the statement. Stanford officials said the offices were damaged and a public safety officer was injured "after being shoved by protesters who were interfering with a transport vehicle." The university did not elaborate on the severity of the injury.

Richard Saller, 71, the former Dean of the School of Humanities and Sciences and specialist in Roman history, is Stanford's interim president and was willing to tolerate the pro-Palestine protests up to a point. However, the arrests, suspensions, and refusal to confer degrees on arrested seniors showed where his red line was.

(After seven years as Stanford president, Marc Tessier-Lavigne resigned in 2023 after an investigation showed his research lab had produced reports that contained "falsified information." He had been cleared of personal misconduct.)

Jonathan Levin, the Dean of Stanford Business School for the past eight (8) years, will become Stanford's next president on August 1st.

Jonathan Levin, a renowned economist, comes to the top spot of one of the world’s most prestigious, and wealthiest, universities at a challenging time in higher education...

Levin, 51 years old, will begin his new job Aug. 1. A Stanford alum and son of former longtime Yale University president Rick Levin, he has been dean of the Stanford Graduate School of Business since 2016.

Jonathan Levin has a glittering pedigree, as well as an unsurpassed record of achievement. He was born in New Haven to Yale Assistant Professor Rick Levin, who rose through the ranks to become Yale's President from 1993 to 2013.

Earning degrees from Stanford, Oxford, and MIT, Jonathan Levin "received the John Bates Clark Medal as the outstanding American economist under the age of 40." As the Dean of the GSB, he kept Stanford atop the Business School rankings.

Successful business educators and leaders know that they must keep their organizations from taking political positions that will alienate customers, suppliers, and governments. Based on his record, Jonathan Levin will strike the balance between free speech, protest, and the rights of all Stanford students to receive a quality education.

I know that this has as much realistic impact as declaring which politician I will vote for, but I am reconsidering my decision to never make another donation to Stanford.

Financial Therapy

(WSJ Illustration)

When I was going to business school 50 years ago, I admired the select few who were in the JD/MBA program. They had to be accepted separately to both the law school and business school--each of which was tough to get into--and devote four years to complete their studies.

But I'm not impressed by this latest dual credential, the financial therapist: [bold added]

The goal of financial therapists ultimately is to help people make good financial decisions, typically by raising their clients’ awareness of how their emotions and unconscious beliefs have affected their sometimes messy experiences with money...

Financial therapists tend to come from mental-health and financial-planning disciplines, and there are signs that their ranks are rising: The Financial Therapy Association has 430 members, up from 225 in 2015. Still, according to the group, fewer than 100 financial therapists have completed its certification process, introduced in 2019. You can be an association member without being certified by it...

Still, there are possible pitfalls when hiring a financial therapist. One major drawback: Anyone can claim they are qualified to practice financial therapy.

No government agency regulates the young profession. Candidates for certification by the Financial Therapy Association must take online courses designed by the association covering financial and therapeutic techniques, counsel clients for 250 hours and pass a 100-question test. But you can call yourself a financial therapist and not be certified by the association.

Meanwhile, the cost of financial therapy varies widely—from $125 to $350 an hour, [Financial Therapy Association President Ashley] Agnew estimates. Insurance rarely covers the tab.

Because of recent well-publicized policy mistakes, "experts" have lost the deference that their credentials used to afford them. However, credentialing and licensing do have their place in verifying that a person has a certain level of knowledge to practice often-complex professions.

The fact that there are zero certification requirements in "financial therapy" will result inevitably in scandal, defalcation, and possibly worse outcomes for clients. I wish it weren't true, but sad experience teaches otherwise.

Flowers and Garlands to Foster City

Replit CEO Amjad Masad at Qatar tech conference.

Another tech company flees San Francisco not for Austin, Tennessee, or Florida, but to Foster City(!): [bold added]

Amjad Masad, the founder and CEO of Replit, an artificial intelligence company in the Bay Area valued at over $1 billion, announced this week that the company has relocated its headquarters from San Francisco to Foster City.

The move was motivated by a desire for a more “livable” city and to establish a new home base for the AI coding startup, akin to how Google is associated with Mountain View and Apple with Cupertino.

“The ‘why’ we’re leaving is boring, sad, and predictable (crime, dysfunction, etc), so instead let me tell you why we chose Foster City,” Madad wrote in a thread on Twitter explaining his decision to move the company. “Foster City embodies the American postwar optimism and the long-lost California pro-growth mentality"...

Masad, who has previously criticized the living conditions in San Francisco, lauded Foster City for its innovative civic engineering and its origins as a master-planned community. He highlighted its lagoon system, designed to combat sea level rise.

He also noted that the tech-infused community of over 30,000 residents is “relatively affordable” compared to the rest of the Bay Area and a “fun place to live or hang out.”

“The city is super livable,” Masad said. “When Haya and I moved to California, we first took residence there and, in fact, incorporated Replit here. Our first bank was Wells Fargo, a few steps from our new office.”

In response to a follower’s comment about Foster City being quieter than the bustling city, Masad saw this as a benefit.

“Quiet is good,” he replied. “That’s why Silicon Valley worked — the most fun thing to do is build computers and software.”

My personal observation is that homes in Foster City are roughly as expensive as San Francisco, and buildable land is almost non-existent. If Replit workers couldn't afford to live in SF, they probably couldn't afford Foster City either.

Rush hour traffic will be worse as Replit workers commute to their homes, but the working environment will be better with no homeless encampments and worries about smashed-in cars. The variety of restaurants is much better than even 10 years ago if one counts nearby San Mateo, and if one likes working in a racially diverse community, Foster City is 30% Asian.

The CEO of Replit couldn't have done a better job if he worked for Foster City's PR department.

San Francisco: Signs of Optimism

The San Francisco turnaround that most people think of.

Politicians and other cheerleaders for the City have said that San Francisco's decline is over. They may just be right.

Tech Leaders Fled San Francisco During the Pandemic. Now, They’re Coming Back.

During the pandemic, scores of Silicon Valley investors and executives such as [Keith] Rabois decamped to sunnier American cities, criticizing San Francisco’s government as dysfunctional and the city’s relatively high cost of living. Tech-firm founders touted their success at raising money outside the Bay Area and encouraged their employees to embrace remote work.

Four years later, that bet hasn’t really worked out. San Francisco is once again experiencing a tech revival. Entrepreneurs and investors are flocking back to the city, which is undergoing a boom in artificial intelligence. Silicon Valley leaders are getting involved in local politics, flooding city ballot measures and campaigns with tech money to make the city safer for families and businesses. Investors are also pushing startups to return to the Bay Area and bring their employees back into the office.

Earlier this month Ian Jacobs, scion to the Toronto-based Reichmann real-estate dynasty and who studied under value investor Warren Buffett, sees opportunity in San Francisco office properties.

Jacobs has lined up commitments of $75 million for his first few deals, the people familiar with the matter said. Ultimately, he hopes to buy 3 million square feet of office space for prices about 70% below what it would cost to build the properties...

Jacobs has told investors it might take San Francisco 10 years to recover, according to his marketing materials. The key to the trade will be buying cheap and holding on until technology companies ultimately return.

Personally I hope San Francisco comes back. Much as I disagree with its governance, when the City sneezes everyone in the Bay Area catches a cold.

People Will Do What's Best for Themselves

From January: EVs pile up in China (Globe and Mail)

5½ years ago we bought the Toyota RAV4 hybrid. We're very happy with its reliability and fuel economy, as well as its 400-mile range on a full tank. The car's emissions are not zero as they are with EV's (this is not the time to get into the debate about lifetime pollution, which includes manufacturing and disposal); let's just say that the hybrid trade-offs were optimal for this consumer.

Apparently many other consumers feel the same way. The production of electric vehicles has far outstripped demand. EVs are piling up on dealers' lots.

As recently as a year ago, automakers were struggling to meet the hot demand for electric vehicles. In a span of months, though, the dynamic flipped, leaving them hitting the brakes on what for many had been an all-out push toward an electric transformation.

A confluence of factors had led many auto executives to see the potential for a dramatic societal shift to electric cars: government regulations, corporate climate goals, the rise of Chinese EV makers, and Tesla’s stock valuation, which, at roughly $600 billion, still towers over the legacy car companies.

But the push overlooked an important constituency: the consumer.

The last laugh goes to Toyota chairman Akio Toyoda, who has repeatedly said that hybrids are superior to EVs.

“People are finally seeing reality,” said Toyota Motor Chairman Akio Toyoda. For years, Toyota and other EV-cautious carmakers had been touting hybrids as a consumer-friendly way to reduce carbon emissions.

Fortunately, America is not yet a command economy like the late lamentable Soviet Union, which produced a glut of low-quality shoes and cars. Eventually consumer preferences win out.

The fEVer has broken

New EVs in Liuzhou, China (Globe and Mail)

Our suburban cul-de-sac has six homes, and three have Teslas. In the Bay Area Teslas are everywhere and have long ceased to be status symbols.

As we mentioned four months ago, we're having second thoughts about joining the parade, and millions of potential EV-buyers are apparently feeling the same way. [bold added]

Ford Motor said Friday it is slashing production of its F-150 Lightning, the electric pickup that has generated major buzz since its launch nearly two years ago. Tesla in recent days cut vehicle prices in Europe and China, and its stock has fallen sharply this month. Hertz last week said it was dumping 20,000 EVs from its rental fleet, replacing them with gas-engine cars.

Meanwhile, the Arctic blast affecting much of the northern U.S. offered a visceral reminder of one inconvenience of EV ownership: Reduced battery performance in cold weather. That phenomenon has left some EV owners out of juice—and the industry with a jolt of bad publicity for electric cars.

EV sales in the U.S. and globally continue to climb, but the pace of that growth—and the fervent enthusiasm around the EV story—has faded. The long wait lists and accelerated factory schedules that characterized the budding EV market in recent years have given way to a backlog of inventory and downsized ambitions.

Carmakers say they remain committed to going electric while calibrating their plans amid multiplying signs that not as many consumers as anticipated are ready to rush into EVs.

Surveys show many car buyers are interested in the technology, but are hesitant to make the switch because of concerns over charger availability and higher prices.

It's very early, but California's mandate to restrict purchases only to "zero emission" vehicles beginning in 2035 looks like it will be extended, cancelled, or riddled with so many exceptions as to be toothless.