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Administering Amid Rapid Change

If someone forwarded this to you, you can read about who I am here. I was a strategist and equity partner at the biggest hedge fund in the world. Now I make my thoughts available to you and implement them with my own capital. This Substack grows via word-of-mouth, so please forward to friends. If you like this writing, you will enjoy my books Master, Minion, and Raising a Thief. This is not investment advice. Investing is risky and sometimes painful.

Quotes that caught my eye:

“All of mankind walks with a limp.”

W.S. Merwin

“The meaning of life always changes, but that it never ceases to be.”

Victor Frankl, Man’s Search for Meaning

Everyone has problems. Each day, as I am downing my first coffee, I think of which ones I will tackle. Every country has problems as well. The question is how well we solve them. That’s what determines if there is progress both personally and as a group.

Globally, there is a full-throated debate over what political system will best solve today’s problems. The debate is thousands of years old but rages on and the outcome is far from certain. In the US, some Americans wonder whether Democracy works, or works fast enough. According to the Pew Research Center, trust in Federal Government is at an 80-year low.1 This isn’t just a US phenomenon. People from El Salvador to India are embracing leaders willing to break existing political and cultural norms if these leaders can deliver meaningful reform.

There is “a growing anger of the American public at their lot in life,” said Senator Chris Murphy, “that the American dream is further and further away.” You can hear our full conversation here. “That anger is real.”

A Gun Case Study

For most of the 20th century, this fight over optimal administration was both political and economic. After the Berlin Wall collapsed, it became clear capitalism works better than communism, ending part of the debate. What isn’t clear is what type of political system better solves social problems. Mass shootings in the US are a case in point.

In one corner of the political system debate, there are what I’d call the corporatists. They believe a strong CEO-type leader (someone like Trump without all the distractions) with leeway to move fast is the best model not only for corporations but for addressing problems like crime, education, and debt. One outcome is Lee Kwan Yew’s Singapore, another is Mao’s Great Leap Forward. In another corner, there are the rule creators and followers. They believe instead in a broad debate over rules, which, once agreed to, are applied to all. Debate reduces the risk of violent policy swings, but it also slows reform down massively. Getting the US to recognize slavery was evil and give Blacks the vote took … well over a hundred years.

From an investor’s perspective, one thing that stands out about the US is the bizarre combination of extreme wealth and extreme violence, including mass shootings. That’s why I found it interesting to speak with Senator Murphy and enjoyed his book, The Violence Inside US. To try to understand both sides of the conversation, I also recently underwent training for a concealed carry permit.

This is the second politician we’ve had on the podcast. Representative Jim Himes also appeared. What struck me about both of them was a general level of competence. You might not agree with everything they say but they show up promptly, give thoughtful answers to questions and, as you would expect of a politician, elegantly skirt difficult issues (Chris, for instance, never revealed what he really thinks about Ted Cruz). If you are interested in public policy, either gig is a great job and it is heartening to see competent people in those seats. I voted for both Himes and Murphy.

Chris was deeply involved in the aftermath of the 2012 Sandy Hook school shooting, in which 26 people were murdered, mostly children. He played a meaningful role in trying to pass legislation to reduce the risk of such attacks and, given how much time has elapsed, his relative success is also emblematic of the challenges of a rules-based system. In polls, voters overwhelmingly support universal background checks but Congress has not followed through. Below is a chart of the US murder rate/100k. The US is on par with Haiti and Ukraine.


Chart: Homicides per 100,000, based on UN data.

If that strikes you as bizarre, it’s because it is. Typically violence declines when a) wealth rises or b) people are in an authoritarian system, like China, which is on the far right of the chart below. Below is the same chart but against wealth, measured in GDP/capita. The US is significantly wealthier than countries with a similar murder rate, $80k GDP/capita versus $2k for Haiti and $5k for Ukraine. (The blue bars measure murder, the gray bars income/capita and I made the US bar red). You are six times as likely to get murdered in the US than you are in Israel or France.


Chris’s book explores why Americans kill each other, kill themselves (more guns are used in suicides than murders)2 and what to do about it. As a strong proponent of the rules-based approach (he is a lawyer after all), he notes in both his book and our conversation that:

  • Murder rates are coming down, slowly. “In Oxford, England…the murder rate in the 1340s was about 110 per 100,000,” he wrote, meaning that life was far more murderous in the past than even the most dangerous places in the world today.
  • The biggest spasms of murder occurred in places with supreme leader-type structures, like the 55 million who died during WW2 and the 40 million under Mao.
  • Violence in the US was high well before Europeans landed due to vicious tribal violence among Native Americans.
  • When laws tighten the sale and possession of firearms, homicide rates fall and when they loosen, they rise.3
  • The lethality of weapons improves with technology.
  • Background checks, which correlate with lower gun violence, are popular. “A 2013 poll noted that support for background checks registered higher than support for apple pie (81%)”…
  • A part of Latin America’s violence is due to criminals in those countries skirting their own strict laws and buying guns on the black market in the US, particularly at gun shows where there are generally no background checks on buyers. Note how high Puerto Rico’s homicide rate is.

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