I have a story out this morning about the staggering amount of unemployment fraud that has happened over the past year — as much as $400b. A quick 🧵: axios.com/pandemic-unemp…
First, yes, this data comes from security companies with skin in the game — ID.me and LexisNexis. Also, crime statistics are always fuzzy. There's nothing here that's precise. On the other hand, government sources aren't disputing these numbers.
The big picture is that unemployment fraud has become systematized. It's sold on a SAAS basis on the dark web, and it's operated by very sophisticated international syndicates in Russia, China, Nigeria, and increasingly Romania.
For a long time during the pandemic, states weren't fighting back against this fraud *at all*. They were too busy just trying to get their claims out. To this day, many states still lack the kind of fraud-prevention tools that are necessary.
Do I know for sure that the number is $400b and not $250b? No. But even the lower estimates I've been getting are still enormous — bigger than China's entire national defense budget.
Put yourself in the shoes of a crime syndicate that has worked out how to game the system. You're naturally going to steal as much as you can as fast as you can, before that window closes. What was stopping this? Very, very little.
Just got a quote from @genebsperling about this. "Widespread fraud at the state level in pandemic unemployment insurance during the previous Administration is one of the most serious challenges we inherited…"
“...President Biden has been clear that this type of activity from criminal syndicates is despicable and unacceptable. It is why we passed $2 billion for UI modernizations in the American Rescue Plan."
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I’m genuinely interested: Who is the man on the left, and what does the $2.1m number refer to?
Ed Ruscha’s “Hurting the Word Radio #2” was bought directly from the artist in the early 70s by Joan & Jack Quinn, for much less than $2.1m; they sold it for $52m.
cc @MasterworksIO who might be able to shed some light on this
My free idea for Substack: Allow people to pay for emails they’ve read and enjoyed, rather than forcing them to only pay for emails that haven’t even been written yet.
A subscription is a big commitment. But when I read a great email like @CaseyNewton’s yesterday, I would love to pay him a buck or two to say “thank you for doing that reporting, this was great.”
An ex-post payment system has other advantages. For one thing, it encourages broader distribution, rather than paywalls. For another, it’s a great real-time indicator of what your audience loves and values and wants to read more of.
Here’s @andrewrsorkin on Friedman and stakeholder capitalism. His choice of words here — “making” stedda “growing” — is an important sleight of hand that often undergirds my debates with @Three_Guineas on this subject. nytimes.com/2020/09/11/bus…
Hotels are some of the longest-running businesses in the world. So let’s consider a hotel that has been run by the same family for 250 years. Its owners need to *make* money, sure. They’re rich capitalists. But they don’t need to *increase* their profits every year.
Since 1972, the idea of “shareholder capitalism” has morphed from “companies need to make enough money to be able to pay their dividend every quarter” into “companies need profit *growth* that will cause their share price to rise indefinitely.”
@nathanielpopper If you’re dividing revenue by average account size, then obviously mostly what you’re measuring is the number of accounts, not revenue per account or per dollar.
This doesn’t make sense either. What is it supposed to mean that Robinhood trades 25,840 options contracts “for every dollar in the average customer’s account”? It’s a nonsensical metric.