1) Chart of the Day

Yesterday we met with Jamie Dimon, CEO of J.P. Morgan.  When the subject of regulation of the banks came up, he referred us to this famous graphic that has become known as "the spaghetti overregulation chart."

The chart is from many years ago, but he assures us that most of these oversight agencies and their maze of cross-current rules are still in place.  Here is how he describes the impact:

"All of these rules are extraordinary, and it does cause a lot of people to be pushed out of the system because banks were afraid of being sued, because if, after the fact, something goes wrong -- coulda, woulda, shoulda -- you could pay a billion dollars" in penalties."

We count more than 20 financial regulatory agencies. The Trump Administration is trying to consolidate, and so far, they have mostly idled Elizabeth Warren's Consumer Finance Protection Bureau (CFPB).  We'd like to see about 10 more of these redundant agencies go away.

2) New Proxy Voting Rule Could Trip Up the ESG Movement

We at UP have been leading the charge against the onslaught of hostile ESG shareholder proposals - including climate change craziness and racial quotas - brought by busybody liberal activists, but often conflict with profitability and shareholder returns.

Here's an innovative idea from Exxon to fend off the onslaught of left-wing shareholder proposals:

Exxon Mobil is introducing a unique shareholder voting mechanism that will allow retail investors to automatically cast ballots in step with board recommendations during annual meetings, a move that may help the top U.S. oil producer fend off activist campaigns.

On Monday, the U.S. Securities and Exchange Commission said in a letter that it would not object to the plan from Exxon as long as the company met certain conditions, including providing annual reminders to investors who opted into the mechanism about their participation. The SEC's response could prompt other companies to follow suit. Several activists said they worry the new option could give Exxon an unfair edge in corporate elections.

Shareholder voting can serve a vital role in reining in incompetent or corrupt corporate management.

But most people buy a stock because they are confident in management. The vast majority of retail investors don't vote their proxies, ceding power to activists who often push agendas that have nothing to do with creating shareholder value. This mechanism will make it easy for mom and pop investors to push back with minimal effort.

3) Black Income Declines Even Worse When Prison Population Is Included

Yesterday we reported on the troubling stagnation of black incomes and the widening income gap between blacks versus whites, Asians and Hispanics.  

This divide is even worse when taking into account that a much higher percentage of the black men are incarcerated and therefore excluded from the official income statistics.

The Census Bureau recently published a working paper that includes median household income estimates (for 2023 - not the 2024 numbers we used yesterday) with prisoners included.  The effect widens the racial gap, especially for males.  The black male median income falls from $63,000 to closer to $56,400 - a loss of $6,400.

4) America's Great Cities Are Turning Socialist

First, Brandon Johnson was elected Mayor of Chicago, then, Zohran Mamdani won the Democratic nomination for New York mayor in alliance with the Democratic Socialists of America. He is the favorite to win the November election.  

This summer, the Democratic Party of Minneapolis endorsed socialist Omar Fateh over Jacob Frey, the incumbent Democratic mayor. The November election is expected to be close.

Now, Seattle may be catching the socialist disease.

This is the left coast city that saw one of its neighborhoods occupied for weeks by protestors after the 2020 murder of George Floyd, reacted against left-wing radicalism and a spike in crime a year later by electing moderates Ann Davison as city attorney and Bruce Harrell as mayor. But in last month's open primary both incumbents placed second against left-wing challengers.

Katie Wilson, the openly socialist contender advocates spending taxpayer money on city-owned grocery stores, subsidies for online blogs and free summer child care.

Why is this happening? Recent polling finds that only four of 10 Democratic voters have a positive view of capitalism and the numbers are much worse in America’s large cities.

Here’s how bad things have gotten in Seattle. Last February, a ballot measure taxing firms such as Amazon, Microsoft, and T-Mobile to pay for new public housing passed with 73% of the vote, and was hailed by progressives as a repudiation of a "corporate-controlled fascism" that rules Seattle. These companies are - and soon we will say WERE - major employers in the city. Already, Microsoft has moved thousands of employees out of Seattle into nearby and more business-friendly Bellevue.

Blue cities within blue states are in danger of becoming occupied by socialists who will hollow out the very commerce and enterprise that made places like New York and Seattle great.  

5) Rising Support For Political Violence by Generation

41% of Gen Z supports political violence. If this trendline continues, it may be a majority belief among the next generation of voters. That's a clear and present danger. This is the generation of snowflakes that demands "safe spaces."

6) Finally an Honest Politician

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