Publisher’s View: The Theranos Dilemma

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Last month Elizabeth Holmes was found guilty of defrauding investors out of a boatload of cash by falsely claiming that her company, Theranos, would transform blood testing with technology that relied on just a tiny sample pricked from a patient’s finger. The centrality of blood in this tale of greed, hubris, and by-gum-I’m-going-to-change-the-world-with-two-straws-and-a-rock – along with millions of backers’ dollars – was just one of several “poker tells.”  Holmes, a pale being with an oddly deep-throated voice, wanted to suck blood from our fingertips, thereby granting her financial immortality.  If we can’t spot a vampire in broad daylight, whose fault is that?

While much media chatter has centered on how Silicon Valley culture spawned the creature Holmes became, really, America’s soul is at least half Theranos.  Yes, we’ll get on that wooden ship, traverse thousands of miles over vomit-inducing surging, silent, saltwater to an unknown place, which, we’re told, looks something like the Garden of Eden where gold can be picked from trees.  Yes, we’ll go west, eliminating any pesky incumbent humans and large mammals along the way, and create an agricultural paradise on intermittently drought-stricken soil that’s only grown low grasses for millennia. Yes, we’ll stuff three people into a tiny sheet metal capsule and send them to the moon.  Hopefully they’ll come back. 

The difference between fraud and America-sized ambition is lying.  But what if we believe our lies?

Politics, and public policy, are beset with the Theranos dilemma. Between 2020 and 2023 San Francisco will spend well more than $1 billion of its backers’ – that is, taxpayers’ – money on assisting people without homes. Yet just last year 646 individuals, many of them unsheltered, died of drug overdoses. There were 5,823 people counted as homeless in 2009, 8,035 in 2019. How many of us expect those numbers to substantially diminish based on present tired strategies even after a billion-plus dollars has been spent two years from now? Money will be paid; no outright fraud will be committed.

California has a goal of cutting greenhouse gas emissions by 40 percent from 1990 levels by 2030, less than ten years from now.  Although embodied in law this objective is more aptly thought to be aspirational. In the Theranos spirit, much of the emission-slashing heavy-lifting is supposed to be done by the state’s monopoly electric utilities. The biggest one of these, Pacific Gas and Electric Company, has declared bankruptcy twice, triggered multiple devastating wildfires, and been charged with manslaughter. 

The second largest, Southern California Edison, wants to be paid a hefty rate of return to install electric panels, circuits, and wiring in private homes as a way of eliminating the use of natural gas. It’s a strategy akin to Edison buying you a refrigerator and profitably renting it to you in perpetuity, with little hope of turning the appliance in for a better model.  

The electric cartel has received hundreds of millions of dollars of its backers’ – that is, captured ratepayers’ – money to install make-ready electric vehicle charging facilities they own and from which they profit. We’re transferring our energy future from a handful of gigantic petroleum companies to even fewer monopoly utilities, in exchange for a possible reduction in the number of smokey conflagrations.  That they caused. No fraud will be committed.

The other half of our American soul is a mixture of technically competent puritans, a just-the-facts Joe Friday sensibility with a dash of Jeffersonian small is beautiful thrown in. This is the spirit that built the Golden Gate Bridge and enabled organic farming to flourish. Enough with flim-flam ambition that, while intermittently accomplishing remarkable things, often leaves us with empty pockets and addled brains.  Blood, sweat, and tears can be worth spilling in common cause for a better future.  Blood for maybe money, not so much.