Streetwise Professor

A jury in a class action lawsuit filed by a group of Class B shareholders (ex-floor traders) found in favor of defendant CME Group. The suit claimed that the CME had breached its contract with the would-be Killer Bs, most notably by opening the Aurora Data Center (“ADC”) and providing access to it to non-Class B shareholders. As the Court (Judge Patrick J. Sherlock) summarized it, according to the plaintiffs

the [ADC] is a trading floor within the meaning of the [Class B Shareholder’s] Core Right 2–hence, only members are eligible to exercise trading righs and privileges at the ADC. The CME Class contends that the defendants breached their Core Rights by (a) allowing non-members to trade CME products from the ADCO trading floor, (b) requiring Clas Be members to pay co-location fees from the ADC, and (c collected co-location fees from market participants without sharing them pursuant to the revenue sharing plan with members

The CME Class also contends that defendants breached their contractual rights by allowing non-members to trade at member rates, providing discounts and special rates to large customers that are better than rates available to members, and charging co-location fees to CME Class members by eliminating the benefits of the CME fee schedule.

I can’t say that the verdict was a surprise, mainly because anything can happen in a trial, especially one with a jury. Which is precisely why such large cases never make it to trial.

Although I did not hear all the testimony based on the original complaint and the record in the case (notably rulings on the motion to dismiss and summary judgment) I think that the verdict is correct. There is a yawning gap between specific facts alleged in the complaint and far broader inferences drawn therefrom.

The complaint relies heavily on quotes from Leo Melamed’s book, For Crying Out Loud: this makes for good atmospherics, but it hardly qualifies as a contractual commitment. It also contains a few facts relating to the Core Rights established under the CME demutualization plan. It then draws inferences from these that are, in my opinion, far too broad and unsupported.

It is clear that the Core Rights were focused primarily on protecting the CME floor. This was essential to get the member’s support for demutualization. Section Three of the article related to Class B Shareholders in the revised Certificate of Incorporation that formalized the demutalization is labeled, in all caps, COMMITMENT TO MAINTAIN FLOOR TRADING. It lays out various volume metrics which if met, precluded the exchange from terminating floor trading in a contract.

The CME rules at the time also provided members (who became Class Bs) “GLOBEX Screen Rights” (emphasis added for a reason that will become clear shortly), and guaranteed Class B shareholders would have access to the GLOBEX2 trading system and definted eligibility requirements for access to a GLOBEX terminal. The complaint also quotes Melamed committing that Class B shareholder clearing fees would never be higher than the clearing fees charged others.

And here’s where the yawning inferential gap appears. From these facts, the plaintiffs claim that in demutualizing the CME gave the Class B shareholders the “Right to Best Access and Closest Proximity to the Globex Platform, and to Allow the Class B Plaintiffs to Share in Globex-Related Revenues.” Not from the facts in the complaint, it didn’t.

Granting Class B shareholders the right to trade on Globex did not, when evaluated on the face of it, give them exclusive access. Nor did it give them “best access and closest proximity” under all future technological improvements to Globex. It gave them access. Via terminals (screens).

The plaintiffs attempted to argue that ackshually post-ADC, Globex was the floor, and since they had exclusive access rights to the floor (and nobody else did), they had a right to Globex on the best possible and exclusive terms under all technological conditions. They claim, based on a quote from Melamed, that since “ultimately electronic trade would become the real ‘price-discovery pit'” therefore Globex was a “virtual trading floor.” Since they had exclusive rights to the meatware trading floor, they had rights to the virtual trading floor. QED!

Nice try, but no cigar. The fulsome description of the commitments that the CME made to maintain the floor makes it abundantly clear that, within the four corners of the contract that the plaintiffs claim the CME breached, the floor was, well, the floor. Those cavernous spaces on South Wacker, not a large air conditioned building filled with humming servers.

The contract did not provide exclusive access to the locus of price discovery, whatever that turned out to be, floor, Globex, or mental telepathy. By the understanding of everybody at the time, the floor was the place where guys traded futures contracts and futures options by screaming and making funny hand gestures.

In sum, taking the allegations in the complaint as true, the CME promised to provide access to Globex to the Class B members. It did provide access to Globex, and continued to do so. It did not promise to provide “best and most proximate access” to any trading platform the CME introduced up to the end of time. That’s an assertion made by the plaintiffs that is not supported by actual evidence.

After a major technological revolution, the CME provided a new type of access–co-location, with higher fees for shorter cables. In my view, the plaintiffs made a completely unsupported, an extremely large, logical leap to assert that the access rights granted with demutualization necessarily conferred preferential access rights to the new technology.

And technological change is the crucial issue here. What this all comes down to is a failure of imagination by all concerned–including Leo Melamed. Specifically, a failure to imagine the emergence of HFT, and algorithmic trading generally. Trading that was not only not face-to-face, but was untouched by human hands via keyboard, mouse, or touch screen.

At the time of demutualiztion, computerized trading was screen trading–and it was often referred to as such. Indeed, even by the standards of screen trading as it became, 1999-era computerized trading was cumbersome. Not until TT screens were introduced (along with copycat products) in the early-2000s did screen trading become user friendly and fast. But in the minds of virtually everyone in the industry at the time, “computerized trading” meant “a human inputting orders to a computerized limit order book via a screen/terminall/keyboard/mouse.”

I was an early and pretty lonely predictor that computerized trading would eventually displace the floor, yet I did not foresee how computerized trading would evolve. My predictions were mocked when made in the mid-1990s: when I released a study (done under the auspices of Deutsche Terminborse, later Eurex) finding that liquidity on computerized and floor markets was approximately equal, the late Robin Wigglesworth, then Chairman of LIFFE, ridiculed me on the pages of the Financial Times as an ivory tower academic who had no clue about the real world. I restrained myself from gloating (publicly, anyways) when Eurex nearly killed LIFFE in 1998, and LIFFE shut its floor and went electronic.

So it’s fair to say that I was more foresighted about computers v. floor than most, and especially most actually in the industry, when I predicted the eventual triumph of electronic trading. But my foresight was far from perfect, as I did not foresee how electronic trading itself would evolve.

In other words, a lot of history was packed into the 12 years between demutualization and the opening of the ADC. The CME responded to the technological change by introducing a new form of access that was tailored to market participants who had virtually (no pun intended!) nothing in common with the Class B shareholders. The new system catered to those who specialized in virtual markets.

If the CME had not done so, it would have breached its duties to the Class A shareholders and perhaps doomed the exchange to oblivion.

The mismatch between the human capital of the Class Bs and the heaviest users of the ADC is massive. The Class Bs did not have the skills or knowledge necesssary to produce value by trading on Globex via co-lo.

Here’s what likely would have happened if the CME had provided access on the basis the Class Bs claim they were promised. Since they could not exploit the nature of the ADC themselves–most couldn’t even make the leap to screen trading–they would have arbed by selling or leasing their access rights to those who could. Or the CME would have bought out Class B shares. And what a negotiation that would have been, given the vast difference between the value of co-location to the typical Class B and its value to the Virtus and Jumps of the world (and hence to the CME). That and the personalities of the Class Bs–personalities suited to the no-holds-barred bargaining on the floor.

In the event, CME concluded that it did not owe the Class Bs anything more than providing some access to Globex (basically on the terms shaped by 1999-2000 technology) and keeping the floor open unless and until the computers killed it. As they eventually, and arguably inevitably, did.

Class B shares did plunge post-ADC. But that’s because the real value of the Class B shares was driven by the exclusive right to access the floor, not by rights to access CME trading platforms by all means imagined or unimagined. ADC at most accelerated the demise of the floor, and recognition of that dynamic cratered the value of floor trading rights, which foreshadowed the closure of the floors (for futures and many options) a few years later.

History did not work out well for the Class Bs. Like 18th-19th century weavers, they were overwhelmed by technological change that they did not anticipate, and which was not anticipated by those who displaced them. They bargained for a demutualization deal predicated on their beliefs about computerized trading technology–as did the CME. The technology changed in ways that few if any even dreamed of. This made their deal far, far less favorable than they had anticipated. In 1999-2000 they hit their drive–right into a sand trap they didn’t see.

So they wanted a mulligan, and the lawsuit was their way of demanding one. But a jury found that they got what they were promised, and a mulligan was not among the promises.

Watch the movie Floored and you can have some sympathy for this particular group of individuals who like many before were rendered obsolete for technological change. The potential for such sympathy is why I thought a jury might find for them, despite their weak legal case. But the jury instead apparently went with the principle that a deal is a deal, even if the deal doesn’t work out they way you like.

Which, ironically–was the way the floor operated.

I’d like to say that the Tulsi Gabbard disclosures of what should have been very old news lit a bombshell under the media and DC. But that would be wrong. They are doing their best to minimize it and denigrate it.

As you would expect from accessories before, during, and after the fact.

Yes, most of us knew the basic contours of the story, despite the media’s concerted attempt to bury it: Obama ordered and orchestrated the abuse of the intelligence community to kneecap the presidency of Donald Trump. And kneecap is probably putting it far too mildly, although the mafia connotations do fit him and his cabal. He and his minions wanted to destroy Trump. They did succeed in devastating his presidency.

The facts are fairly straightforward. Despite myriad rumors–spread most by the world’s sorest loser, Hillary Clinton–that Putin had interfered in the 2016 presidential election in order to help Trump, on December 6, 2016 the intelligence community stated in a draft Presidential Daily [Intelligence] briefing” that it had failed to find credible evidence of that.

Recall that Hillary and others were bleating that “Russian hackers” had swung the election to Trump, by various means, including hacking emails (but not those on her sekret server because that was impenetrable!) and perhaps even altering vote counts. By December 6, 2016 the CIA had concluded, and was prepared to tell Obama in the PDB, that Russia had not done so.

Stop the presses! And that’s exactly what the FBI, under the direction of Mr. 86 himself, James Comey, did: they refused to sign on to that briefing, leading it to be deep-sixed.

This is important particularly when the next phase is considered. That deep-sixing gave Obama plausible deniability for knowing about Russian non-shenanigans. Though I would bet you dimes to donuts that Comey did that at behest of the White House–precisely to preserve Obama’s patina of ignorance.

Immediately thereafter, Obama held an all hands meeting that directed the IC to perform an “analysis” of Russian interference. That effort was controlled down to the last jot and tittle by the loathsome John Brennan, Obama’s loyal and thuggish creature, who proceeded to cook the intelligence books in a way that would put George Tenet of Iraq infamy to shame.

Brennan had a preconceived conclusion. A mission, really–a mission ordered by Obama. To show Putin wanted to get Trump elected, and assisted in doing so.

This required him to exclude myriad evidence (more on this below), and to include dubious “intelligence.” It all came down to a single Russian source. A “Russian” source who had worked in the Russian government years before but was in 2016 ensconced in the DC suburbs. Who told the CIA that Putin was “counting on” Trump winning–based on his alleged conversations with alleged Russians.

What does that even mean? CIA analysts didn’t know, and thought of multiple interpretations. SOP is for the multiple interpretations of ambiguous information to be made explicit. Ape Man Brennan grunted no. He also mused, “doesn’t it have the ring of truth?” And ordered that the ICA report only the single interpretation that it meant Putin was pulling for Trump.

Brennan also ensured that the Steele Dossier was front and center in the version of the Intelligence Community Assessment (ICA) that went to Obama–but was excluded from the sanitized versions provided to Congress and the public.

Brennan’s main–and by “main” I mean “only”–source makes the Curveball of Iraq infamy look like Richard Sorge (“Stalin’s impeccable spy”). And even goddam news reporters are not supposed to rely on a single source for a story, let alone the head of the CIA for a document going to the president–and soon to be leaked to the media.

Further, at best Brennan’s ICA captured a Putin wet dream. But aspirations mean fuck all: did he actually accomplish anything to advance those aspirations? The ICA did not identify any, and again prior to the Obama command the CIA’s professional analysts determined he had not.

The initial Democratic reactions to Gabbard’s (first) document drop, mouthed by Senator Muck Warner of Virginia (a true swamp creature), were that Tulsi was “mixing apples and oranges.” Ya see, the CIA report was about hacking election infrastructure dontcha know, and the ICA was about other interventions. Like what? A piddling sum on lame Facebook memes?

In fact, the switch from apples to oranges demonstrates that the fix was in. Apples–“RUSSIAN HACKERS!!!”–was obviously a no go. So Obama et al had to switch to oranges–“PUTIN WANTED TRUMP TO WIN!”

You can argue all day whether Brennan was lying about the stuff that actually went into the ICA–an ICA, I will remind you, that was almost immediately leaked (according to the plan, no doubt) and which formed the basis for the Russian conspiracy hoax that roiled the nation for the next 3 years (at least). But you cannot dispute at all that Brennan lied promiscuously by omission, which can be–and was, in this instance–as misleading and manipulative as outright falsehoods: when testifying in court you don’t have to take an oath to “tell the whole truth” for no reason.

What was left out? The list is long, starting with what was in the abortive PDB. Then there is the omission of details about the source of the “counting on” statement, and the disagreement about the meaning of that statement. And crucially, the omission of other evidence, likely far more credible, that completely undercut the “Putin❤️ Trump” narrative.

Specifically, the Russians supposedly believed–based on hacked Democratic emails (isn’t that just too ironic for words?)–that Hillary was a medical mess, and an emotionally unstable, heavily medicated bitch on wheels. (Talk about credible! I got your credible right here!)

So if they wanted Trump to win, why hold back on this?

Well, kompromat, obviously. Which would be a reason for them to want Hillary to win. Couldn’t blackmail Trump with golden showers BS, but could blackmail her with all the credible dope about her vicious temperament and poor health. (Remember the 911 ceremony fiasco?)

Maybe it’s true. Maybe it isn’t. But the sourcing is evidently far more solid than one dude in Virginia several degrees from Vladimir Putin and the Steele confection. So, the ICA should have included this to give a full picture. But it didn’t.

So what we have is not apples vs. oranges, but cherries. Namely cherry picked (alleged) intelligence intended not to inform, but to deceive. A full accounting of the information available to Brennan and the IC would have made the narrative risible and utterly unbelievable.

And Trump’s first presidency would have been completely different, and American history would have been completely different.

If I were to give Obama a Homeric epithet, it would be “the mendacious.” And here he lived up to it. Rather his “office” did: Mr. Mendacious didn’t bother to issue a statement in his own name, or make a recorded denial.

The statement is gaslighting of a like seldom, if ever seen. It starts out: “Out of respect for the office of the presidency. . .” Yeah. So much respect for the office of the presidency that President Mendacious ordered an intelligence confection, and oversaw its leaking to the media, with the express intent of damaging and indeed destroying the presidency of his successor.

“[O]ur office does not normally dignify the constant nonsense and misinformation flowing out of this White House.” Uhm, who was the producer of nonsense and misinformation in 2016-7? Obama and his minions.

So what should happen? Well, unfortunately not what will likely happen.

In a world of cosmic justice Obama and those he directed would be brought before the bar and made to pay for their egregious conduct, although it is hard to think of a penalty that fits such appalling mendacity.

From a politically pragmatic angle, going after Obama is unwise. Yes, the Democrats went hammer and tong after Trump post-presidency one, but two wrongs don’t make a right. And I remind you that that move likely boomeranged: Trump would have probably ebbed into relative obscurity if he did not have to fight for his freedom against vengeful prosecutors. Going after Obama wouldn’t boomerang in the same way, but it could boomerang in other ways.

But by all means go after Brennan, Comey, and Clapper. And follow the usual mob prosecution handbook. Start from the bottom and work your way up. Starting with the 5 CIA analysts Brennan handpicked to cook the intel.

And don’t leave out Brennan’s successor, Gina Haspel, who disobeyed orders to release in 2018 the House Permanent Subcommittee on Intelligence report that was the basis for most of Gabbard’s revelations. Haspel is an accessory after the fact.

But even that’s probably too much to expect. The Swamp looks out for its own.

Elon Musk has apparently jumped back into his various businesses with both feet since his butthurt departure from his temporary government post. And in so doing, he is resurrecting his standard playbook. Virtually every play therein, in fact.

For example:

Just left the @Tesla design studio.

Most epic demo ever by end of year.

Ever.

— Elon Musk (@elonmusk) July 14, 2025

5 months???? I DON’T THINK I CAN WAIT THAT LONG!!!! I’m dying here!

The hype. About the future. That’s the Elon MO.

Which brings to mind some of Elon’s past totally awesome demos. Like the Solar Roof . . . that was not a functioning product at the demo, and has never been seen in the wild since–but which he used to con hundreds of millions of dollars out of the State of New York. Or the Hyperloop.

Since this latest is from the “design studio” I’m also expecting some Potemkin Village presentation of a concept, the realization of which will always be mañana.

He has to do this for the same reasons he did these things before 2018 or so: Tesla is really struggling, with sales dropping sharply around the world and the prospect of cash flow challenges are raising its ugly head. Part of the sales drop is sector-wide, as the popularity of EVs is plunging, but part of it is Tesla specific, due to Musk’s political forays alienating his traditional customer base, and the fact that all Tesla models are getting a little old in the tooth. (Another reason to hype the “epic demo”). Furthermore, the looming disappearance of the $7,500 EV tax credit, which Tesla has benefited from for years, will shift back the demand curve by that amount: Trump credibly said that this was the real reason for Musk’s meltdown. That’s a big demand drop on top of the drop attributable to consumer EV disenchantment.

So Elon has to keep the balloon afloat. In the past he’s done that with hype–which, admittedly found an accepting audience. He’s doing it again. Whether it will work again remains to be seen given that whereas fundamentals–notably massive subsidization and consumer optimism about EVs–worked in his favor before, they will not do so again.

His TL is full of hype about Grok. A week after Grok went Nazitard (and Erdotard). Never go Nazitard.

He’s also hyping his mission to Mars. You know, to save humanity.

Starship will take humanity to Mars
pic.twitter.com/VEVWmjwb2w

— Elon Musk (@elonmusk) July 13, 2025

I am not competent to judge, but some who are claim that the huge rocket that will go there–the one that keeps blowing up–can never be a reliable launch vehicle because of fundamental physical constraints. I’ll keep an open mind on this, but be cautious about projecting SpaceX’s previous remarkable achievements onto the SuperHeavy.

Another MO is taking money from one of his ventures to fund another, that is using his winners as piggy banks to support his cash sucks. The most notorious example of this was Tesla’s purchase of Solar City.

And here we go again: “SpaceX to invest $2 billion in Musk’s xAI startup.” And again: “Tesla to hold shareholder vote on whether to invest in xAI.”

Recall that X was folded into xAI. It is clear now that the X acquisition was not about free speech (although it did have that effect, at least compared to the old Twitter, and at least for a while), it was about getting massive input to train Grok. Never forget: if it’s free, you are the product.

And Musk is using X and AI not just as a source for LLM training: he is using it to hype his other ventures. And not primarily through his own TL. As a friend wrote to me: “And don’t forget using X to amplify his company with AI accounts (there are estimated to be 100s of millions of AI accounts) and silencing critics.” And it is definitely clear that the X algos are definitely not to create a true all-to-all experience, let a thousand flowers bloom free speech experience. Instead, they heavily favor and promote specific accounts and throttling most others, leaving most of us shouting into the X void.

Musk also just announced Grok for Government:

Announcing Grok for Government – a suite of products that make our frontier models available to United States Government customers

We are especially excited about two new partnerships for our US Government partners

1) a new contract from the US Department of Defense
2) our…

— xAI (@xai) July 14, 2025

What would the “cause” be (click on “Show more”)? Just think of all the grist for the Grok mill that this will provide. And think of all the commercially valuable information that will be gleaned. Hell, maybe xAI will start a hedge fund that will outperform Nancy Pelosi!

And, of course, he no longer has to play well with others (like Scott Bessent!): “Elon Musk is Back to Work and Burning Through Executives.”

Every one of the many headlines about Musk from the last few days is like something burped up out of the Memory Hole. Although the ostensible subject matter is different, the MO is the same.

And the essence of that MO is overpromising and underdelivering. I kick myself for letting my hopes stifle my experience when it came to DOGE. It won’t happen again.

Elon Musk announced the formation of The American Party. He advances it as a response to the uniparty that is wildly unpopular, and in his view has betrayed Americans.

On the one hand, there is some reason to agree to these overall themes. The supposed catalyst for his 3rd party venture was the passage of the reconciliation bill, dubbed the One Big Beautiful Bill, which Musk claims is wildly fiscally irresponsible. Again, there is reason to nod in agreement here at least with respect to the substance.

The problem is that politics is the art of the possible, and there is no way that any bill that meets Musk’s approval could pass this Congress. Which is in itself a bearish indicator for Musk’s party: it indicates that the political support for a drastically thinned US government is, at this time anyways, virtually non-existent, alas. The Democrats think the bill is too stingy (especially with regard to Medicaid and welfare). Many Republicans were unwilling to go along with things like a sharply reduced SALT deduction or further reductions in subsidies for renewable energy. If there was a groundswell of support for fiscal sanity, it would have pushed Congress in that direction. There is obviously no such thing. It is far from the median voter.

In his recent tantrums, Musk has betrayed his complete lack of political acumen. As I wrote earlier, he acted–and acts–as if governing the United States is like running a company with a craven board of directors beholden to him. It doesn’t work that way. There are too many independent power centers that cannot be brought to heel. Trump pushes the boundaries of what the executive can accomplish: Musk wants to go far beyond that, and that’s just not remotely possible.

Musk perhaps believes that his personality cult will carry over from Tesla fanboyz to the nation at large . As if.

At present, Musk is the most hated man in America. Even more than Trump, because almost everyone who hates Trump hates him for supporting Trump during the election and the brief DOGE moment, and everyone who likes Trump hates him for betraying the president. So to the extent that Musk has succeeded in uniting America, it has been to unite it in hating him.

So who does that leave? A few anti-Trump Republican weirdos like Thomas Massie. Oh. And the Libertarians! Can’t forget the Libertarians!

That party could hold its convention in a phone booth. If there were phone booths anymore.

Then there are the practicalities.

Who would be the candidates of this party? A third party based on a personality, like Ross Perot’s, can at least have that personality at the top of the ticket–if he’s native born. But Musk can’t run for president because he’s not. Moreover, a control freak like Musk would only permit a cipher to run for president of his party, and only a cipher would be willing to run on those terms. (Not to mention that if elected by some miracle, once having his hands on the levers of power the cipher might decide that Elon is dispensable).

Vote for Elon’s Puppet! is hardly an inspiring campaign theme.

As for Senate and House races–which are the vital ones if Musk is to achieve his stated purpose of sharply restricting government–one can only imagine how fringe-y the candidates would be. Anyone with a decent shot within one of the establishment parties would not be likely to execute a career kamikaze attack. Further, even if Musk or a PAC could put fund potentially competitive candidates, they would lack organization and infrastructure.

Then there is the fact that the winner-takes-all US system is hostile to the creation of enduring third parties. Gerrymandering has only exacerbated this tendency.

Smart billionaires–like George Soros–realize that it is better to manipulate through the existing parties and game the current system than to try an end around them.

But Elon is far too much of an egomaniac, and this endeavor is far to much ego driven (due to Trump shunting him aside), to play this smart. This new party is a vanity project pushed by a man who is not just attempting to work in a domain in which he has little experience, but in a domain in which he has proved to be incompetent, uncomprehending, and temperamentally unsuited.

And don’t forget that although Musk has achieved some signal successes, namely SpaceX and Tesla, he also has a litany of over-hyped failures, like Solar City (and the merger thereof with Tesla), the Solar Roof, and the Hyperloop. Even Tesla succeeded only because of the largesse of government that Musk now pretends to deplore–and because Musk’s consummate con-man skills allowed him to keep the capital flowing in for long enough to avoid the fate of say, Fisker.

Also don’t forget that Musk has vulnerabilities that Trump can exploit if Musk’s party becomes too much of a threat. I think the main reason for Musk’s pivot from Democrat to Trump supporter was the regulatory war the Biden administration waged against Tesla and SpaceX. Don’t think that Trump can’t–or wouldn’t–do the same if Elon poses too much of a threat.

SpaceX has leverage due to its vital role in defense projects, but even that does not confer immunity. Musk’s security clearance could go in a trice–and as I’ve written before, no one else with his drug use would retain such a clearance. The structure of SpaceX would still give Musk control, but if he attempted to use that in a way that was detrimental to vital defense programs, I have no doubt that ways would be found to overcome that as well. His ties with China, for example could be used to disqualify him from exercising any control over the company.

Since he has none of the competitive advantages in politics that he has/had in rocketry and EVs, I’d say his party is far more likely to be another of his failures than another of his successes. But if you want to go to Elon’s party, I’m not stopping you.

But I do have one question for you: is the party BYOK? (Bring your own ketamine). And before you join, ask yourself about the prudence of tying yourself to a man who is clearly unstable, and who exacerbates his instability through substance abuse.

Not long after I posted my Schumpeter/Elite Overproduction piece, the FT ran an article titled “It’s a bad time to be a graduate.”

It’s a bad time to be a graduate https://t.co/5MXrnL2Fex | opinion

— Financial Times (@FT) July 6, 2025

The gist:

From North America to Europe, university leavers are struggling to find suitable work. The unemployment rate for recent college graduates in the US has for the first time been consistently above the national level since the Covid-19 pandemic. In the EU, the employment rate of 15- to 25-year-olds has fallen over the past two years. Even the crème de la crème are struggling. The percentage of MBA students from Harvard Business School and MIT Sloan without a job offer three months after graduation has risen sharply since 2021

(Note this is not strictly a western problem. It is a major issue in China as well).

The article concludes:

A surfeit of underemployed elites is bad for society and the economy. To ensure it does not become a feature, education must evolve from being a ticket to a job to a toolkit of skills for a changing world.

Skillz! What a concept!

Yes, specific job-related skills are important, but generalized critical thinking skills are even more important. But those are something that modern academia fails to impart, and has done so for years.

The article also mentions that the fraction of jobs advertised that require a college degree has dropped. This indicates that not only is the knowledge/skills acquired in an education deemed increasingly irrelevant to the extent it even exists, but that the signaling value of post-secondary education has also dropped. The most likely explanation for this is that grade inflation, dumbing down of coursework, etc., have reduce the correlation between individual characteristics (e.g., generalized intelligence) and the cost of completing a degree. Something that anyone can get with no differentiation (e.g., grades) is worthless as a signal.

These are some symptoms and effects of the devolution of university education. A related, and disturbing, phenomenon is the increased ideological slant of the modern academy. Three examples from just the last couple of days.

First, Zorhan Mamdani’s father–a professor at Columbia, where Zohran lied about his race in a failed attempt to get in—gives a disquisition on American history:

Zohran Mamdani's father believes:

??The Allies and Nazis had the same goal
??Abraham Lincoln was Hitler's inspiration
??White people are the oppressors, America is the root of all evil
??BLM is the resistance

Blah blah blah. Another wealthy leftist who hates America. Now we… pic.twitter.com/jbRFVjov38

— MAZE (@mazemoore) July 5, 2025

That is so disgusting and bizarre that it is self-refuting.

The next example is from my alma mater, The University of Chicago:

Eman Abdelhadi: “F*** the University of Chicago… but it’s my best shot at power.”

At Socialism 2025, @UChicago professor Eman Abdelhadi called her employer “evil colonial landlord."

Use it. Organize it. Seize its structural leverage.

“We don’t have power… but I work at one… pic.twitter.com/Mes06SYMEp

— Stu (@thestustustudio) July 6, 2025

Of course, as is de rigeur, Abdelhadi wants to use that power to advance the Palestinian cause, among others.

Why the University of Chicago gives “power” to someone who boasts of her hate for it, and her desire to exploit its reputation for her own twisted ends, is beyond comprehension.

In a similar vein is my, er, “colleague,” University of Houston Poli Sci prof David McNally, in remarks apparently delivered at the same socialism conference where Abdelhadi ranted. (Unfortunately not the late Baltimore Orioles All-Star lefty Dave McNally).

“University of Houston Would Become George Floyd University”

At Socialism 2025, University of Houston professor David McNally laid out a radical vision for what happens when an “insurgent social movement” seizes control of a university. His words weren’t abstract.

“Let’s assume… pic.twitter.com/4UfYxeEzD8

— Stu (@thestustustudio) July 6, 2025

He also wants to seize power at the university in order to advance his far left agenda. And his keffiyeh of course signals his pro-Palestinian (and therefore anti-Semitic) bona fides.

Bring it, dude. See how that works out for you. Look for me. I’ll be on the other side of the barricades.

Given that such individuals have achieved prominence at prestigious universities, and presumably spread their poison in the the classroom, is it any wonder why (a) a large fraction of college graduates are unemployable, and (b) many are unthinking leftists seduced by the siren song of socialism?

Universities need to be torn down to the studs, if not razed to the ground. The rot is far too deeply embedded in the walls for merely cosmetic changes to be worth the candle.