As part of our annual fundraiser, we report to you, our loyal readers and donors, on what we’ve accomplished in the year since we last asked for your support. If you already appreciate how much we do, please pass “Go” and proceed immediately to the Tip Jar, which tells you how to donate via check, credit or debit card, or PayPal.
After all, where else can you find incisive commentary, lively and often funny debate, one-stop news, and cute animal pictures?
This was a rough year. We hope we were able to help you navigate it and keep a measure of sanity by making sense of regularly overwhelming and often inconsistent press accounts, as well as providing a haven to hang out with the like-minded. And those of you who are prospering despite (or even due to) Covid-19, please dig even deeper this year, since some of your friends here at the site may not be able to contribute as much as they’d like. The Tip Jar is calling your name.
What We Did Last Year: Having an Impact
2020 was an uphill battle: Covid-19 creating personal challenges as well as hitting ad revenue; mainstream news coverage of important stories too often factually challenged if not unhinged; social media policing for conformity; and search engines continuing to down-rank independent sites, making it hard for new readers to find us. And my 92-year-old mother’s short-term memory is starting to go, forcing me to start managing her affairs, which impinges on my blog time and concentration. Lambert and Jerri-Lynn also suffered Covid-related difficulties (fortunately not contracting the disease).
However, this year again showed Naked Capitalism to be right and early, just as we were when we launched this site to chronicle the coming financial crisis. In 2016, our forecast for the next ten years focused on how systems like globalism and neoliberalism were starting to come apart. Squeezing workers had become so successful that it was not just weakening growth but undermining the legitimacy of the elites.
In 2020, we saw institutions around the world floundering, not just via inadequate responses to unprecedented crises, but via failures of basic operational capacity, like distributing Covid-19 test kits, ramping up production of PPE, or even scaling up vote by mail. In the UK, the Government apparently still has not come to grips with the logistical and IT implications of having hard borders, an outcome it seems to be working overtime to engineer.
Despite these considerable difficulties, we expanded our coverage last year while still keeping our high standards:
Shaking up CalPERS. We’ve been engaged in a long-term campaign to reform the governance at CalPERS, an institution whose former CEO, Fred Buenrostro, is in Federal prison for taking bribes from a placement agent for Apollo and four other private equity firms. Yet rather than cleaning up, CalPERS selected a criminal defense attorney to be its general counsel and has fiercely resisted efforts to improve transparency and accountability, including attacking board members who didn’t defend CalPERS management, even when they were caught out with what anywhere else are carreer-ending offenses, such as lying about one’s education during the hiring process, as current CEO Marcie Frost did.
Even readers who have no interest in public pension fund have become fans of the CalPERS saga as an extended study of institutional dysfunction.
This year, we publicized how CalPERS’ recently-hired Chief Investment Officer Ben Meng looked to be making bad decisions, such as his desperate plan to have CalPERS go pedal-to-the-metal with risk to try to meet an unrealistic 7% return target: adding more private equity, jumping into private debt, and leveraging the entire portfolio. Meng also forced out highly respected senior investment managers.
But what tarnished Meng was a series of mis-steps, including dumping a tail-risk hedge run by Universa, a firm advised by Nicholas Nassim Taleb, just before it would have produced a billion dollar payday. Meng dug his hole deeper by making the implausible claim that CalPERS had other hedges, which Taleb and one of the managers Meng had forced out, Ron Legnado, now at Universa, lambasted.
We broke the story that Meng had led a $1 billion CalPERS investment in a Blackstone fund, when Meng owned shares in Blackstone, Carlyle, and an Ares credit fund. That’s a conflict of interest under California’s Political Reform Act. An anonymous party quickly filed a complaint with the Fair Political Practices Commission. Meng quit with immediate effect three days after our piece went live.
The press seized on the spectacle of Meng’s lighting-speed exodus and uncharacteristically credited our work. However, the anti-reform forces are shameless. Even though State Controller Betty Yee called for an emergency board meeting to discuss various measures to improve board oversight of staff, such as the delegation of authority to the CEO, Board President Henry Jones conducted an improper special board meeting, rudely shutting down Yee’s request to agendize her issues for a public discussion, and illegally refusing to allow any public comment. One influential retiree group has called for Jones to resign, and another has demanded that CEO Marcie Frost be put on administrative leave while a newly-created inspector general investigates. Neither has yet come to pass.
Since the Meng fiasco, we’ve stumbled across staff not just hiding important expenses from the board that might embarrass Marcie Frost, but significant misrepresentations in CalPERS Comprehensive Annual Financial Report. Accounting expert Francine McKenna saw CalPERS cooking its books as troubling, raising concerns that employees are engaging in misconduct like kickbacks.
Tracking Covid-19. Here, Naked Capitalism, both our writers and our commentariat, showed how powerful vetting information can be. Readers have regularly cited Naked Capitalism as having the best coverage of Covid, outdoing the mainstream media. We were early to recognize that the rapid spread in Hubei and the severity of China’s responses meant the risk of global contagion was high. We were early to understand the danger to front-line workers, particularly in the medical industry. We were early to be skeptical that a vaccine would be through clinical trials and in distribution soon enough to prevent severe economic dislocations. We were early to recognize that the PPP loans were stopgaps, and significant failures of small businesses were coming if there wasn’t a second relief package. Thanks to Hubert Horan, we were early to warn of the deep and lasting damage to the airline industry and how that will continue to have profound effects on the tourism and hospitality sectors.We were early to question the orthodoxy about children not being contagion vectors. We were early to warn of the dangers besides morality, like lung and kidney damage, as well as “long Covid.” And we’ve provided links to and write-ups of important studies.
Monitoring Gaia. Surprisingly for a finance blog, Naked Capitalism consistently delivers on environmental themes as well, covering recent disasters like the oil spill on Mauritius in detail (and with on-site sourcing from the commentariat), as well as comprehensive coverage of events and systems in the biosphere, like locust invasions, mangrove and coral loss, wild fires, soil, rivers, and the personhood of lakes. We also occasionally cover permaculture and gardening. This coverage has attracted a commentariat knowledgeable in all these fields (especially soil).
Expanding Links and overall writer effort. Due to the increased news flow (and noise) of the Trump presidency and Covid-19, we’ve increased the coverage of our daily Links feature from a former maximum of 45 articles and tweets to 55 to 60. This represents a significant extra effort, day in, day out. We have been able to maintain, and even increase, our level of original reporting and the range of our original posts by increasing our level of staffing. Lambert is now taking on more Links coverage than he did in the past, and Jerri-Lynn is also contributing more often.
Showcasing John Siman’s award-winning book reviews. Classicist John Siman’s meaty, vivid double features, book reviews combined with author interviews, are deservedly popular, and not just with Naked Capitalism readers. His review of Crisis of Conscience: Whistleblowing in an Age of Fraud won the Washington Monthly’s Kukula Award for non-fiction book review, beating out submissions by writers from the New Yorker, New York Review of Books, Literary Hub, and the Los Angeles Review of Books. If you haven’t already, please congratulate John both in comments and via the Tip Jar!
Some of our accomplishments are continuing core activities:
Upholding rigorous standards of reporting and analysis in the face of a captured and credulous mainstream media. We challenge you to identify another publisher that does as much as we do with so little. One of Naked Capitalism’s hallmarks, of being early and accurate, has been the result of our long-standing rigor, as we proved again with our Covid-19 coverage. Other fresh examples are recognizing Boeing’s 737 Max debacle as a symptom of deep-seated problems, Jerri-Lynn’s reporting on plastics and food security and Hubert Horan outlining why Covid is creating deep and lasting damage to the airline industry. Recall that Hubert’s pioneering work on Uber’s lack of a path to profit took some time to win recognition.
Keeping our eagle eyes sharp becomes more important yet more difficult as intensified propagandizing in combination with resource-starved and too-often captured journalists together create informational halls of mirrors.
Getting first dibs on Michael Hudson’s posts. Michael Hudson graciously and regularly gives NC the first publication opportunity because he likes you! Or at least most of you :-)
Fostering the best commentariat. Naked Capitalism depends on its commentariat. And with general stress levels high and the media keeping the dial at 11 on Trump (and Trump reflexively trolling back), dialogue all over the Web, including here, has gotten even more fractious. To help preserve collective sanity, we’ve reluctantly put in more tripwires, and appreciate that most of you have borne getting caught in moderation with good humor, although we recognize that a minority has not taken well to have more comments being put on hold for review.
Having more comments to check puts even more of a load on our already overstretched comments DJ Jules Dickson. A moderation helper dropped out last year for health reasons. This year, we had hoped to bring a second person on board to spell Jules regularly, but that individual had to bow out due to pressing family matters. Keep your fingers crossed that we will be able to revive that plan later in the year.
We want to admit where we came up short:
Holding fewer meetups than we hoped. As you know, Covid-19 put a big kibosh on that! We did put the budget for meetups towards increased staffing by our writers, which supported our more extensive Links section and more original reporting.
Neglecting New York Magazine. New York Magazine would like to run two articles from me a month, and that offer still stands. We’ve only done four in total :-(. We’ll discuss during the fundraiser what we hope to do to pick this opportunity back up.
How This Fundraiser Works
Please give whatever you can. $5, $50, or $5000 are all appreciated. If you can only afford to give a little, then give a little. If you’re doing well these days, then please give more. If you are prospering from the stock market and real estate booms, we hope you’ll include us in your good fortune.
We’d like to get broad-based participation from the Naked Capitalism community. Our target is 1100 donors for this fundraiser. Some have told us they are in tough shape now and can’t give but hope to contribute when their finances recover. So if you are having a good year, can you dig deeper and give more to make up for loyal readers who can’t participate in this fundraiser?
It will all even out in the end. Everything you do – reading, commenting, giving, and sending us information – is essential to making this community work. You can help right now by following this link to make a donation.
Our accompanying kickoff post gives a high-level view of what we’d like to do. Over the course of the fundraiser, we identify specific things that your donations will fund and tell you when we’ve hit each of these monetary goals.
The first goal is funding for digital infrastructure essentials, particularly in light of the large number of comments (which loads our database of nearly 1.5 million comments). We also are behind on some tech tasks and we may also need to harden our infrastructure.
This plumbing may not seem very sexy, but imagine what happens when your water is cut off or your power fails! This is one of the critical foundations for this site, so please help us keep it sound.
We hope we can keep our “nut” for digital essentials at the same level as last year. So our first target is $19,000. Once we’ve hit that, we’ll let you know what our next item is.
How to Give
There are multiple channels for donating, and you will see them all when you go to our Tip Jar. To give by check (which saves us PayPal/credit card fees), please make it out in the name of “Aurora Advisors Incorporated” and send it to:
Aurora Advisors Incorporated
164 Peachtree Circle
Mountain Brook, AL 35213
At the same time, please send an e-mail to email@example.com with the headline “Check is in the mail” (and just the $ amount in the message) so we can count your contribution in the total number of donations.
Thanks again for your interest and generous support!