The Canaries Are Already Dead

MIT is, most people would admit, a pretty good school.  Even those who don’t know a lot about universities probably associate MIT with science, engineering, and math, and in fact, it is one of the leading universities in the world for those (and other) areas. E.g., the QS World University Rankings have named it the top university in the world the last 14 years, USN&WR Global Universities Ranking has it #2, as does The Times Higher Education World University Rankings. There have been over 100 Nobel Laureate recipients associated with MIT. If you meet a Harvard grad you might think, oh, they may not actually be all that smart – they could be just a legacy admission, but if you meet an MIT grad you probably do expect that they must be smart, especially since MIT does not have legacy admissions. Even President Trump, who rails against “elite universities” and who has slashed science funding in his second administration (more on that later), can’t help but rave about his smart uncle who taught at MIT.

So when the President of MIT warns about reductions in research funding and in graduate school admissions, we’re not talking about the proverbial canaries in the coal mine dying. We’re talking about miners going down.  

If you are a scientist, or anyone who benefits from science, you should be worried. Credit: Microsoft Designer

In a video message last week, MIT President Sally Kornbluth warned of some startling losses: over 20% drops in federally funded research, in new federal research awards, and in graduate student enrollment. Overall, the school’s research enterprise has shrunk 10% in the last year.

Gulp.

"That is a striking loss for one of the most influential and productive research communities in the world,“ Dr. Kornbluth said. She added:

The fact is that we’re looking at a real drop in research being done by the people of MIT. It’s a loss of momentum for faculty and students and frankly, it’s a loss for the nation. When you shrink the pipeline of basic discovery research, you choke off the flow of future solutions, innovations, and cures, and you shrink the supply of future scientists.

Make no mistake: although MIT itself may be an outlier, what is happening to it is not. Ted Mitchell, president of the American Council on Education, told The Washington Post: “This is the first of many of these kinds of alarms that will be ringing." Brendan Cantwell, a professor of higher education at Michigan State University, also told WaPo that if MIT is scaling back how it does research, that means universities across the country should be thinking about scaling back and adjusting. The ripple effects will go far and wide, and will have bigger impacts than we realize.

I’ve written before about the Trump war on U.S. science, and while some of his attempted funding cuts have been halted by courts, no one should have their hopes up. The American Physical Society reports:

The National Science Foundation has awarded just 613 grants this fiscal year, at about 20% the level at this time in the year in each of fiscal years 2021 through 2024, according to the group Grant Witness. The amount of funding awarded is at similarly low levels, about one-third that of previous years. The trend is visible across each of NSF’s directorates. New and competitive award renewals, which undergo full peer review, are particularly low compared to previous years. The National Institutes of Health has seen a similar trend regarding its number of awards, having given out about 10,000 awards this year compared to around 18,000 at this time in previous years; total award funding is also down by a similar amount. NSF and NIH are even lagging behind fiscal year 2025, during which thousands of grants were canceled and fewer grants were awarded than in previous years.

Credit: Dan Satterfield

Meanwhile, of course, there was last month’s firing of the entire board that is supposed to oversee the National Science Foundation (NSF), which itself has been without a director for the last year. More than 2,500 scientists joined in a letter to Congress decrying the move, warning that the move “ramps up an alarming attack on the ability of the US to engage in basic and applied research, and to be competitive globally, particularly given that China is now investing more in R&D than the US.”

Dr. Kornbluth cited one threat to MIT’s financial well-being that most of us may not have realized: the excise tax on endowments. Harvard takes some grief for its $56b endowment fund, but Yale ($41b), Stanford ($38b), Princeton ($33b), MIT ($25b), and U Penn ($22b) also have large endowments. Congress during the first Trump Administration put a 1.4% excise tax on university endowments, but the so-called Big, Beautiful Bill introduced a sliding scale that gets up to 8% for the universities with the largest endowments – including MIT. It expects to pay $240 million annually for that tax, and that’s money not being spent on supporting research or educating exceptional students. Yale expects to pay $280 million annually.

Maurice McInnis, the President of Yale, warned: “The impact of this tax will also be felt far beyond our campus and our hometown. Taxing universities undermines the education and research that fuel life-saving medical breakthroughs, life-changing innovations, and economic growth in communities across the country and around the globe.” 

It feels less focused on raising revenues and more focused on punishing elite universities, and damn the consequences.

Dr. Kornbluth also pointed out the Administration apparently antipathy towards international students. The U.S.-based international education nonprofit NAFSA recently issued a report estimated that foreign student enrollment fell 20% for this spring semester. Not all of them are brilliant, not all of them would have gone to MIT or another elite research university, and not all of them would have stayed in the U.S., but our track record of attracting and retaining the best & the brightest from all around the world is in danger.

This. Is. Not. Good.

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 I didn’t go to an elite college, and I know that not all scientific or technological breakthroughs come from people who do (or even who graduate from college at all). But I do know that America did not become what it is without those elite research institutes, and if we continue to try to kill the golden geese (to move away from the canary metaphor), we’re going to miss out on the gold they produce.

Officers Eat Last

A New York Times interview with Rep. Jake Auchincloss (D - Mass) by Bret Stephens caught my attention. I am somewhat familiar with Mr. Stephens from his various pieces in NYT; he is definitely a conservative, but in the old, pre-MAGA sense where it meant you worried about spending but you didn’t hate people who weren’t like you. Rep. Auchincloss, on the other hand, was unfamiliar to me, but the headline of the interview – The Democrat Who Makes Me Listen – proved apt.

Serving others first? What a novel concept. Credit: Microsoft Designer

For me, the final line the interview summed everything up. Rep. Auchincloss is a Marine veteran, having served in Afghanistan. Mr. Stephens asked: “Final question. If there is one thing you learned in the Marine Corps which every American should know, what is it?” Rep. Auchincloss’s reply was succinct, to the point, and highly instructive: “Officers eat last.”

“Officers eat last” – wow. That’s a philosophy I can buy into. That’s a credo I hope I can live up to. That’s a slogan for a political movement I could get behind.

Of course, I’m not just talking about literally only Marine officers, and I’m not just talking about eating. I’m sure Rep. Auchincloss intended that it was a life lesson that should be applied broadly. I.e., people in authority should make sure the people they are responsible for get taken care of before they take care of themselves. I don’t think that attitude is solely responsible for the esteemed Marine esprit de corps, but it’s got to be part of it.

The trouble is, we don’t see much of that attitude in the rest of America. When Congress failed to pass a budget and millions of federal workers went without paychecks, they (and their staffs) kept getting paid. When the White House went slashing various budgets, it didn’t eliminate White House jobs.

If you want to keep your blood pressure under control, don’t even ask how generous the Congressional retirement package is. Suffice it to say that, if you are one of the few workers who still qualify for a defined benefit pension, it is almost certainly less than theirs. Don’t get me started on how members of Congress seem to get richer – a lot richer – while in office, possibly due to insider trading loopholes.

According to Gallup, only 10% of Americans approve of the job Congress is doing, with 86% disapproving, but they don’t care. They get paid anyway, and most House seats aren’t competitive, so most incumbents are in little danger of getting voted out.

This is no “officers eat last.”

It’s not just politicians. All those billionaires – over 1,000 of them in the U.S. alone! – didn’t get (or keep) all that money by putting anyone else first. CEOs used to “only” make 15x the average worker, but now make closer to 300x, with their pay going up 20x the average worker’s pay increase in 2025 alone. If there was ever an era of benevolent CEOs looking out for their workers, that era has long gone. If CEOs can underpay or, better yet, layoff their workers, the better for their compensation. The rich guys eat first, with the finest dining their employees’ labor can finance.

Or private equity investors. They’ve wrecked their havoc on manufacturing and other industries, and more recently have turned to areas like housing and health care. They’re not just coming for your job, they’re coming for where you live and where/how you get care. They don’t make any pretense that what they’re doing is for your good; they are openly in it for the R.O.I. They’re face first in the dinner trough and don’t really care if you even get any of the scraps.

It’s obscene. It’s the opposite of officers eating last.

Rep. Auchincloss calls for “economic patriotism,” saying:

If the core idea of America is that the circumstances of your birth shouldn’t determine the condition of your life, you cannot have a durable “demos,” a durable sense of a shared American future, if you have an ossified American aristocracy. And that is what has happened. The top 10 percent of the American economy are people just increasingly divorcing themselves from the rest.

He wants, in particular, for more wealth to be taxed at death, so the richest Americans can’t keep passing along their wealth without ever paying taxes on the gains. He recognizes that government overregulation can be an issue, but correctly points out that the unbridled corporate monopolization we’ve seen in recent years is also harmful. Gordon Gecko famously said “Greed is good, “ but Rep. Auchincloss counters with “Officers eat last.”

I know which side I’m on.

If the Democrats had any sense, which they don’t, they’d seize upon this slogan and help define how it applies to our everyday lives. They’d build out what “economic patriotism” means. Dems are still getting blamed for NAFTA and letting China join the World Trade Organization, with the subsequent loss of many U.S. jobs, but those jobs didn’t just magically disappear. Rich people decided they could get richer by offshoring them, and if that meant losses of lots of jobs and devastation of many communities, so be it. The Dems should never have taken the blame, and, instead, should have aggressively pointed the finger at the true culprits.

To be honest, I don’t think the Democrats are the right party to advocate this idea. They have their own cadres of rich people, both in office and among their donors, and it shows in their policies. The Democratic brand is so toxic that they may be beyond reinvention. That’s why, say, Rob Sand in Iowa’s Governor’s race or Graham Platner in Maine’s U.S. Senate race are carefully trying to not talk about their ties to the party, and Dan Osborn in the Nebraska U.S. Senate race is running as an independent (with the tacit support of the state’s Democratic Party).

Those are the kinds of politicians who could make the “officers eat last” pitch and make it work.  Chuck Schumer? Kamala Harris? Gavin Newsom?  I don't think so. 

Neither party has a real vision for how – or agreement on even whether – to address the growing inequality in America, much less a vision for how to address AI and other revolutionary technological changes that are upon us. We should have long ago grappled with climate change and microplastics, but there was too much money in the status quo.

It’s not the answer, but “officers eat last” could be part of an answer. Show me the candidates who believe in, live by, and will fight for it, and they’d have my vote.

Blasts From the Past

Two names from the past popped up my radar screen this week, making claims for the future: GameStop and Blackberry. It’s as William Faulkner once wrote (Requiem for a Nun): “The past is never dead. It’s not even past.”

Talk about blasts from the past. Credit: Microsoft Designer

Last time I thought of GameStop, they were the beneficiary of a meme stock frenzy, back in 2021, wherein a bunch of day traders used Reddit to drive the stock price up to insane levels (up 1500%!) in a effort to punish professional short sellers. It survived that, closed hundreds of stores -- and quietly accumulated a 5% stake in eBay. Then a couple of days ago CEO Ryan Cohen announced GameStop was making an unsolicited – and potentially hostile – bid to acquire eBay.

Now, keep in mind, GameStop has a market cap of about $11b, while eBay is valued at $46b. eBay may not be quite the cultural force it once was, but at least it never had to rely on a meme stock rally to pump its stock. So this is more like The Mouse that Roared than David versus Goliath.

GameStop is offering $125 per share, a $56b bid that was about a 20% premium over eBay’s stock pre-bid. The bid is financed 50% by cash and 50% by GameStop stock. GameStop claims to have a $20b commitment from TD Securities to back the bid.

“EBay should be worth—and will be worth—a lot more money,” Mr. Cohen said in an interview with Lauren Thomas of The Wall Street Journal. “I’m thinking about turning eBay into something worth hundreds of billions of dollars.” He sees, for example, using GameStop’s remaining thousands of physical locations as places to collect and authenticate items from eBay sellers. The bid letter outlines: “GameStop staff already inspect and grade hardware and trading cards every day. Sellers walk in, items are verified on the spot, and listings carry a trust badge."

“There is nobody who is more qualified, based on my experience, to run the eBay business,” he asserted to Ms. Thomas.

EBay has acknowledged the offer, promising it “will carefully review and consider the unsolicited proposal to determine the course of action that it believes is in the best interests of the company and all eBay shareholders,” focusing on value to its shareholders.

No one other than Mr. Cohen seems all that excited about the bid, with GameStop’s shares dropping and eBay’s rising since the bid, making it more costly. “Without more details on proposed financing, we think the market would be skeptical of a potential deal’s feasibility,” analysts at Morgan Stanley wrote in a research note late last week. “The business is firing on all cylinders,” analysts at Bernstein wrote. “Why disrupt things? The turnaround is working.”

Still, Mr. Cohen is undeterred. “We are just starting,” Cohen said on CNBC’s “Squawk Box.” “For obvious reasons, eBay is a public company, there’s all kinds of perverse financial incentives from the board to the management team. So there’s only one way to approach something like this.” He believes the combination “could be a legit competitor to Amazon.”

But, at least, there’s no denying: people are talking about GameStop.

That’s probably more than one can say about Blackberry. It’s been even longer since I’ve thought about it. Those of us of a certain age remember Blackberry well; it was king of mobile business until the advent of the iPhone, with its distinctive physical keyboard. Blackberry – formerly known as Research in Motion – no longer makes phones, but its strength was never the hardware, it was the software that powered those devices. And a software company it owns – QNX – is still ubiquitous.

Ben Cohen profiled QNX in The Wall Street Journal this week. Mr. Cohen writes:

The company’s most lucrative product is not hardware but the hidden software in 275 million cars on the road today. In fact, BlackBerry’s essential technology can be found in all sorts of unexpected places, and you wouldn’t find it even if you went looking for it.

He further explains: “QNX is the operating system that enables all kinds of driver assistance: collision warnings, blind-spot notifications, adaptive cruise control, pedestrian detection and steering you back into a lane when you’re drifting into trouble.”  John Wall, QNX’s president, told Mr. Cohen: “We’re the foundation. Everything pretty on top wouldn’t work without a strong foundation.” 

Source: WSJ

QNX claims it is “the software foundation of Physical AI,” serving the automotive, defense, heavy machinery, medical device, and robotics industries, among others. In medical devices, for example, it helps power surgical robots, diagnostic equipment, patient monitoring, and drug delivery systems, claiming that 9 out of 10 medical device manufacturers use its solutions, in over 50 medical device types.

QNX accounts for half of Blackberry’s revenue and has helped Blackberry get four consecutive profitable quarters since the first time since the iPhone hit. I don’t know what WSJ’s policies are about investing in companies reporters write about, but Blackberry’s stock surged after his article hit. It’s not all about his fine reporting though; investment guru Timothy Sykes says: “The cash flow picture is what serious traders should focus on. BB generated roughly $46.1M of operating cash in the latest quarter and $44.4M of free cash flow, while keeping the balance sheet relatively clean with a current ratio near 2.1 and modest leverage.”

And to help keep the ball rolling, QNX recently partnered with NIVDIA to create “a unified platform for safety‑critical edge AI across robotics, medical, and industrial systems.” Mr. Wall said: "As robotics, medical, and industrial systems become more autonomous and software defined, safety and determinism cannot be afterthoughts. Integrating QNX OS for Safety 8.0 with NVIDIA IGX Thor and NVIDIA Halos Safety Stack brings together a trusted real‑time safety foundation and a powerful functional safety platform for edge AI.”

So Blackberry is doing well, thank you very much, even though the main driver for its success is even less known. As Mr. Wall admitted to Mr. Cohen, “If I tell them I work at QNX, they don’t know what that means.”

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I’ve never been in a GameStop, I rarely even browse on eBay, I was always only a begrudging Blackberry user (I long for Palm Pilots), and I don’t even know if my car uses QNX. But for some reason, I’m glad that GameStop and Blackberry are still alive and kicking. Reinvention is said to be good for the soul, and, sometimes, it is essential for a company. But if you have been waiting for Ask Jeeves to finally supplant Google in search, you are going to be disappointed. Not everything has a second life.