This seems like a good time to revisit the idea of omnicompetence

A companion piece to Brian Klaas's secret geniuses and our Ithuvania thread. More relevant now than when Levy first wrote it.

Tuesday, September 12, 2017

More magical heuristics -- Levy's omnicompetence

Yesterday, I introduced the term magical heuristics (still open to a better name) to describe nonrational mental tools used by many journalists and investors particularly when discussing science and technology. I laid out four general categories for these heuristics: magic of association; magic of language; magic of attitude; magic of destiny.

This post from Alon Levy (one of the most important contributors to the Hyperloop debate) perfectly fits with two of these categories, magic of association and magic of destiny (the idea that there are chosen ones among us destined for greatness). The whole thing is very much worth reading, but I've selected below the paragraphs that are most relevant to this thread and added emphasis to bring home the point:

There is a belief within American media that a successful person can succeed at anything. He (and it’s invariably he) is omnicompetent, and people who question him and laugh at his outlandish ideas will invariably fail and end up working for him. If he cares about something, it’s important; if he says something can be done, it can. The people who are already doing the same thing are peons and their opinions are to be discounted, since they are biased and he never is. He doesn’t need to provide references or evidence – even supposedly scientific science fiction falls into this trope, in which the hero gets ideas from his gut, is always right, and never needs to do experiments.

...

I write this not to help bury Musk; I’m not nearly famous enough to even hit a nail in his coffin. I write this to point out that, in the US, people will treat any crank seriously if he has enough money or enough prowess in another field. A sufficiently rich person is surrounded by sycophants and stenographers who won’t check his numbers against anything.


...

The more interesting possibility, which I am inclined toward, is that this is not fraud, or not primarily fraud. Musk is the sort of person who thinks he can wend his way from starting online companies to building cars and selling them without dealerships. I have not seen a single defense of the technical details of the proposal except for one Facebook comment that claims, doubly erroneously, that the high lateral acceleration is no problem because the tubes can be canted. Everyone, including the Facebook comment, instead gushes about Musk personally. The thinking is that he’s rich, so he must always have something interesting to say; he can’t be a huckster when venturing outside his field. It would be unthinkable to treat people as professionals in their own fields, who take years to make a successful sideways move and who need to be extremely careful not to make elementary mistakes. The superheros of American media coverage would instantly collapse, relegated to a specialized role while mere mortals take over most functions.

This culture of superstars is a major obstacle frustrating any attempt to improve existing technology. It more or less works for commercial websites, where the startup capital requirements are low, profits per employee are vast, and employee turnover is such that corporate culture is impossible. People get extremely rich for doing something first, even if in their absence their competitors would’ve done the same six months later. Valve, a video game company that recognizes this, oriented its entire structure around having no formal management at all, but for the most part what this leads to is extremely rich people like Bill Gates and Mark Zuckerberg who get treated like superstars and think they can do anything.

 

Reposting this one because it's April 1st and because it has one of my favorite titles

 We haven't had much occasion to mock the education reform movement recently (Michelle Rhee hasn't had many feature stories lately). Fortunately, we can always count on McKinsey and Company for new material.

 [Not sure what happened to the formatting. Perhaps it's Blogger playing a prank on us.]

Tuesday, April 1, 2014

Being a management consultant who does not suffer fools is like being an EMT who faints at the sight of blood

An April 1st post on foolishness.

When [David] Coleman attended Stuyvesant High in Manhattan, he was a member of the championship debate team, and the urge to overpower with evidence — and his unwillingness to suffer fools — is right there on the surface when you talk with him.

Todd Balf writing in the New York Times Magazine

Andrew Gelman has already commented on the way Balf builds his narrative around Coleman ( "In Balf’s article, College Board president David Coleman is the hero and so everything about him has to be good and everything he’s changed has to have been bad.") and the not suffering fools quote certainly illustrates Gelman's point, but it also illustrates a more important concern: the disconnect between the culture of the education reform movement and the way it's perceived in most of the media.

(Though not directly relevant to the main point of this post, it is worth noting that the implied example that follows the line about not suffering fools is a description of Coleman rudely dismissing those who disagree with his rather controversial belief that improvement in writing skills acquired through composing essays doesn't transfer to improvements in writing in a professional context.)

There are other powerful players (particularly when it comes to funding), but when it comes to its intellectual framework, the education reform movement is very much a product of the world of management consultants with its reliance on Taylorism, MBA thinking and CEO worship. This is never more true than with David Coleman. Coleman is arguably the most powerful figure in American education despite having no significant background in either teaching or statistics. His only relevant experience is as a consultant for McKinsey & Company.

Companies like McKinsey spend a great deal off their time trying to convince C-level executive to gamble on trendy and expensive "business solutions" that are usually unsupported by solid evidence and are often the butt of running jokes in recent Dilbert cartoons.  While it may be going too far to call fools the target market of these pitches, they certainly constitute an incredibly valuable segment.

Fools tend to be easily impressed by invocations of data (even in the form of meaningless phrases like 'data-driven'), they are less likely to ask hard questions (nothing takes the air out of a proposal faster than having to explain the subtle difference between your current proposal and the advice you gave SwissAir or AOL Time Warner), and fools are always open to the idea of a simple solution to all their problems which everyone else in the industry had somehow missed. Not suffering fools gladly would have made for a very short career for Coleman at McKinsey.

 

In the interest of efficiency, I’m reusing the following headline: “Controlling the boards of both companies may have helped with the negotiations”

As you may have read over the weekend, Elon Musk found a company that agreed to take the social platform formerly known as Twitter off of his hands. Perhaps not coincidentally, the buyer happened to be another company controlled by Musk. 

From CNN:

Elon Musk on Friday evening announced he has sold his social media company, X, to xAI, his artificial intelligence company. xAI will pay $45 billion for X, slightly more than Musk paid for it in 2022, but the new deal includes $12 billion of debt.

Musk wrote on his X account that the deal gives X a valuation of $33 billion.

“xAI and X’s futures are intertwined,” Musk said in a post on X. “Today, we officially take the step to combine the data, models, compute, distribution and talent. This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”

Musk didn’t announce any immediate changes to X, although xAI’s Grok chatbot is already integrated into the social media platform. Musk said that the combined platform will “deliver smarter, more meaningful experiences.” He said the value of the combined company was $80 billion.

Musk has made a slew of changes to the platform once known as Twitter since he purchased it in 2022, prompting some major advertisers to flee. He laid off 80% of the company’s staff, upended the platform’s verification system and reinstated suspended accounts of White supremacists within months of the acquisition.

While X’s valuation is lower than what Musk paid for the social outlet, it’s still a reversal of fortunes for the company. Investment firm Fidelity estimated in October that X was worth nearly 80% less than when Musk bought it. By December, X had recovered somewhat but was still worth only around 30% of what Musk paid, according to Fidelity, whose Blue Chip fund holds a stake in X.

 

Since both of these are privately held businesses, the details are even murkier than usual, but Patrick Boyle does a good job of cutting to the chase.

While the news reports that Twitter is back above the $44 billion price that Elon Musk paid for it in 2022, many investors are highly skeptical about this valuation, as user numbers and advertising revenues have declined significantly since 2022. The transaction that values the business at $45 billion was X AI, another Elon Musk company, buying it. A person who saw the documents described the earnings number reported as being wildly adjusted to the FT. It's not obvious that an unrelated party would pay anything like that to buy the 12th most popular social network.

This transaction is similar to when Tesla bought SolarCity in 2016, where Musk folded a company that's been losing value into one that's been gaining value. He owned 54% of the AI company and used it to buy Twitter, in which he owned 80%.

The other investors in XAI shouldn't be too happy with this, as they owned a clean investment in an AI company that is now saddled with a social media app that has lost its relevance.

About that SolarCity deal, here's what we had to say back in 2021...

Controlling the boards of both companies may have helped with the negotiations

 One of the essential texts for understanding how Musk became the world's richest man is this long-form expose by Bethany McLean (best known for her reporting on Enron). We've talked about this piece before, but it's worth revisiting given recent events.

Remember Musk's fortune is almost entirely based on the sudden spike in Tesla's stock price and his holdings in the company (though the bonus deal didn't hurt). I'm not a finance guy, so I may be missing something, but it appears that a big chunk of those holdings came from this deal (keep in mind, Tesla was trading around $40 at the time of the merger. As I'm writing this it's at $742).

 Emphasis added.

SolarCity was founded by two of Musk’s cousins, Lyndon and Peter Rive, who grew up with him in South Africa. Musk, who put in $10 million, was the largest shareholder and chairman of the board. The initial idea, the Rives explained, was not to be a manufacturer but rather to control the entire consumer experience of going solar, from sale to installation, thereby driving down costs. For a time, SolarCity was a hot stock, growing almost tenfold from its public offering in 2012 to its peak in early 2014.

...

 But the initial success of the company’s stock masked some difficult realities. SolarCity’s business model was to front the costs of installing solar panels and allow homeowners to pay over time, which created a constant need for cash. That required raising money from outside investors, often big banks, who were then entitled to the first chunk of the payments homeowners made—leaving SolarCity in a never-ending scramble to raise more debt. The real engineering that took place at SolarCity, in short, was financial, not environmental.

On the consumer side, SolarCity was plagued by complaints about misleading sales tactics and shoddy installations. As the problems mounted, some workers began to feel manipulated by the company’s talk about being a force for good in the world. “I turned a blind eye to a lot of the silliness because of the idealism,” says one former senior employee. “I don’t know when the Rubicon was crossed, but there were micro-crossings every day.”

...

On October 28, 2016, just before shareholders were set to vote on the acquisition of SolarCity, Musk strode onto a platform erected on the set of Desperate Housewives at Universal Studios’ back lot in Los Angeles. He talked about the existential threat presented by global warming and the desperate need for sustainable energy. Then he gestured to a group of houses that had been set up around him. They might look normal, he said, but they actually featured a revolutionary new product called the Solar Roof—shingles that would last longer and cost less than a regular roof, even before factoring in electricity. Tesla expected production to begin the following summer.

The next month, shareholders approved Tesla’s acquisition of SolarCity. “Vote tally shows ~85% of unaffiliated shareholders in favor of the Tesla/SolarCity merger!” Musk tweeted. The deal doubled Tesla’s debt load, but it was good for Musk, who converted his stake in SolarCity into more than $500 million in Tesla stock. By preventing SolarCity from collapsing, he also shored up his most valuable asset: investor faith in his own genius. If any piece of his empire had faltered—if Musk were shown to be fallible rather than superhuman—it would have cast doubt on the narrative that enables him to raise cheap capital for his money-losing enterprises.

“Thanks for believing,” Musk tweeted to his shareholders.

That October, as Musk was making his pitch about the Solar Roof, a former Fortune 500 executive was watching it online at a friend’s barbecue. The former executive, who had spent years researching solar technology, understood what it took to make the Solar Roof work—and he was confident that Musk hadn’t figured it out. “He spewed total BS,” says the executive, who asked not to be identified. “I was flabbergasted. I was convinced in the moment that the shingles were fake.”

Adopting the Twitter handle @TeslaCharts, the executive began drawing on his Ph.D. in science, and his background as a financial analyst, to share infographics that detailed Musk’s overreach. His follower count mushroomed, and he became a core member of a group of outspoken Tesla critics who go by the Twitter hashtag #TSLAQ—Tesla’s stock symbol followed by the Q that companies pick up when they are delisted due to bankruptcy.

Many of them, in fact, were first drawn to Tesla by SolarCity, with its pile of debt and mountain of losses. “If it weren’t for SolarCity, #TSLAQ wouldn’t exist,” says @TeslaCharts. He points out that Musk faced a catch-22 of sorts: If he hadn’t bailed out SolarCity, his whole debt-laden empire might have cracked. Yet without the bailout, Tesla would be far more healthy. “When the history of Tesla is written,” he says, “the acquisition of SolarCity will be seen as the moment where the narrative took a decisive turn.”

Others shared @TeslaCharts’ suspicions about Solar Roof. Robinson, who covers SolarCity for the Buffalo News, had flown to Los Angeles for Musk’s presentation. Afterward, he asked an engineer for the company if the tiles Musk had pointed to were real. “Oh no,” the engineer replied. “These are dummies. We just popped them up here to show you.” Robinson wasn’t outraged—it made sense that Musk would show a prototype—but he took note of the contrast between the rhetoric and the reality. “They made it sound like they had figured out how to get it to work,” he says.

And Tesla continued to make it sound that way. In early 2018, the company announced that production of the Solar Roof had begun in Buffalo. That fall, Tesla told Bloomberg News it was “gearing up for tremendous growth in 2019. We have a product, we have the customers, we are just ramping it up to a point where it is sustainable.”

But in its quarterly letter, a month earlier, Tesla had confessed that the product wasn’t actually ready yet. “We continue to iterate,” the company wrote. In a legal filing, Tesla acknowledged that the much-hyped technology it had acquired from Silevo wasn’t all that it was cracked up to be. And last May, an investigation by Reuters revealed that most of the solar cells being produced in Buffalo were being sold overseas, not used in the Solar Roof, because demand was so low.

Customers who tried to purchase a Solar Roof took to Twitter to share their horror stories: Kevin Pereau, a California homeowner, said he paid a deposit of $2,000 to have a Solar Roof installed more than two years ago—then never heard from the company again. He got his money back only after he started tweeting at Musk every single day.

Musk, meanwhile, is still making promises. Last March, he proclaimed that 2019 would be the “year of the Solar Roof.” In late July, he tweeted that Tesla is “hoping” to turn out 1,000 Solar Roofs a week by the end of the year. But even onetime believers have become doubters. The MIT Technology Review, which included the Solar Roof in its list of 10 “breakthrough technologies” in 2016, now calls it a “flop.” In a recent analyst note, JP Morgan warned that Solar Roof will be a “niche” product at best. Musk has “sustained a kind of Kabuki theater in which the Solar Roof ramp is always imminent, but never here,” wrote investor John Engle, a #TSLAQ member.

CGI and spreadsheets have revolutionized the construction of Potemkin villages

Our favorite YouTube financial commentator, Patrick Boyle, ("The city would naturally form a line as it tried to get away from itself," "There seems to be a plague of jellyfish and really a plague of anything is usually not considered good.") revisits the ongoing fiasco of Neom, a multi-trillion dollar project that manages to simultaneously set the bar for dictator's hubris and techno-optimistic stupidity (and take it from me, those are both very competitive fields at the moment). 

Boyle also makes a rather profound point about not just this proposal but about our age of bad ideas.

In another example, the price of a “boutique hiking hotel room” was marked up to $1,866 per night, from $489 per night. I don’t know what a boutique hiking hotel room is either—but I’m guessing it doesn’t come with a parking space.

One way or another, these adjustments helped push the project IRR [internal rate of return -- MP] up to 9.3%, which is above MBS’s target of 9%.

That’s the great thing about spreadsheets: just like you can design any building you want in CGI, you can achieve any IRR you want in a spreadsheet.

It always works.

Saudi Arabia's Megaproject Disaster!





Long time readers of the blog will be shocked to learn that McKinsey & Company had a hand in this.

There are some winners, however. Consulting giant McKinsey & Company is reportedly earning more than $130 million annually for its services, despite some controversy surround its role, given the firm’s involvement in both the planning and validation of some of the project’s financial projections, per the story. A McKinsey spokesman tells the WSJ the firm has “strict protocols to prevent conflicts of interest in our engagements.”

Running with the (Tesla) Bulls

Before diving into Wall Street attitudes toward Tesla, we have to remind ourselves that there are at least three different measures of success for a car company: sales, profitability, and stock price. With respect to the first two, Tesla has been, at best, marginally successful, largely due to various government loans and subsidies. With respect to the third, however, it has been absolutely phenomenal. That is always at least part of the context for the buy recommendations. This is a stock that has defied gravity for so long, and has burned so many short sellers, that it seems foolhardy to point out the fact that it has never justified the price people were paying for it.

Of course, analysts can't just come out and admit that this is the rationale for their recommendations. They have to come up with reasons that can at least slip by investors who are pre-inclined to buy anyway. 

At the moment, with things looking ever darker for the company, the bull case mainly comes down to this from Jim Cramer:

Jim Cramer’s Urgent Advice on Tesla, Inc. (TSLA): “Elon Must Remind Us – Tesla’s an AI & Humanoid Company!”

Cramer's case is characteristically incoherent— they paid the man for his expressive skills, not his analytic ones. For a clearer presentation of the same basic ideas, you'll need to turn to Cantor Fitzgerald:

7 reasons to buy Tesla stock after 52% price crash: Cantor Fitzgerald

Analysts at Cantor Fitzgerald led by Andres Sheppard upgraded the stock to"Overweight" from "Neutral" in a note on Wednesday, arguing that the recent share price decline represented an "attractive entry point" for investors.

"We believe the recent selloff represents an attractive entry point for investors with >12-month investment horizon (and who are comfortable with volatility," Sheppard wrote.

He listed seven material catalysts that he sees boosting the stock in the long term. Those include:

1. "The introduction of Robotaxi segment (June 2025)."
2. "Rollout of FSD in China (started in 1Q25)." FSD refers to Tesla's Full Self-Driving software package, which costs $8,000 per vehicle.
3. "Rollout of FSD in Europe (we expect 1H25 pending regulatory approval."
4. "Introduction of lower-priced vehicle in 1H25 (we expect initial price of ~$30,000 inclusive of tax credit."
5. "High volume production of Optimus Bot (2026)."
6. "Initial deliveries of Optimus to customers (we expect 4Q26E/1H26)."
7. "Introduction of Semi Truck." The firm said it expects the truck to start production in the second half of this year or early 2026.

Sheppard wrote that his bullishness on Tesla was crystallized after he visited the company's Gigafactory and AI data centers in Austin, Texas.

...

"Waymo's vehicles have reported >25M cumulative autonomous miles driven on public roadways as of 12/2024," the analyst wrote. "Tesla on the other hand, has reported >3B cumulative autonomous miles driven (on supervised Full Self Driving)."

Now this one we can have some fun with. Let's take them in order. As we go through these, remember that the company is priced so high that its profitability has to increase by something like an order of magnitude in the next 2 to 5 years to justify holding on to the stock, let alone buying more.

1. Despite wildly optimistic estimates, it is not at all clear how big the self-driving taxi market is going to be. What is clear is that Tesla is nowhere near being the leader in this field. Waymo, some Chinese competitors, and one or two other companies are well ahead. As for those supposed billions of miles of autonomous driving, this is another one of those cases where quality counts more than quantity. Waymo has far better data, including lidar. This means that the AI actually knows when that thing that looks like a white van in the fog is actually there.

2. FSD is similar to BYD's "God's Eye" with one important difference: BYD includes the system for free with all of its cars.

And while on the subject of Tesla's tech vs. BYD's... (From the LA Times Hiltzik)

Tesla’s reputation for cutting-edge technology is eroding; the company’s largest Chinese rival, BYD, just announced a new charging technology it says can add about 250 miles of range to an EV in five minutes — even less than the time it takes to fill a conventional car’s gas tank to the same level. Tesla says its top-of-the-line superchargers need 15 minutes to add 200 miles of charge.

3. A couple of points: First, any estimate based on pending regulatory approval in the next 3 months is by definition optimistic. Second, Tesla's and, more to the point, Elon Musk's reputation in Europe may present something of a problem here.

From Hiltzik:

Nevertheless, the company’s sales are crashing worldwide. In the European Union they fell off a cliff in 2024, to 7,517 vehicle registrations from 15,130 the year before. The drop was especially steep in Germany, where Musk irritated voters by throwing his electoral support behind the extreme-right neo-Nazi party Alternative for Germany. There, new Tesla vehicle registrations fell by 76.3% in February from the same month a year earlier— that is, to 1,429 from 6,029.

4. Putting aside the issue of a tax credit in the current environment, the low-priced Tesla has been a year away for more than a decade now. The company recently scrapped its long-promised low-cost Model 2. The plan now appears to be to launch a stripped-down Model Y, which, as former Tesla bull Fred Lambert points out, will probably mainly serve to cannibalize the already shrinking demand for existing Model 3/Y sales.

5. And 6. Where do we start? The general stupidity of humanoid bipedal designs for robots? The dubious market? Or the fact that the company is at least a decade behind its competitors in this field?

7. The prototype for the Tesla Semi was introduced in 2017, with production supposed to start 2 years later. The vehicle went years over schedule. The reviews from engineers and design experts were brutal. Its performance has been spotty, and at one point, it shut down I-80 for 16 hours after catching fire. During that time, it spewed out toxic smoke and took 50,000 gallons of water to extinguish.

These seven reasons appear to be repeated verbatim from Musk and other representatives of the company. Of course, credulously accepting the dubious claims of Elon is a long-standing tradition in the financial press; however, this particular case has an interesting backstory.

From FT Alphaville  

Cantor family values

The judiciary is under attack; Fannie Mae just added a cybersecurity engineer at SpaceX and social media group X to its board of directors (though he left two days later); and Cantor Fitzgerald’s former chair and CEO Howard Lutnick has been pushing Elon Musk’s Starlink to federal officials.

...

Coincidentally, Cantor senior equity analyst Andres Sheppard on Wednesday upgraded Tesla to “overweight” from “neutral”, his change of view triggered, he says, by a trip to the car company’s Austin gigafactory and AI data centers earlier this week. 

...

Lutnick divested his business interests in Cantor Fitzgerald upon becoming Trump’s secretary of commerce precisely to avoid any potential conflicts of interest. His sons Brandon and Kyle were promoted to chair and executive vice chair at the same time.   

And from Hiltzik:

Lutnick didn’t disclose during that appearance that the investment firm he headed before taking his government job, Cantor Fitzgerald, held about 740,000 shares of Tesla as of Dec. 31, according to its latest government disclosure.

The holdings were valued that day at $403.84 each, or about $299 million. Their value has declined to about $174.8 million as of Thursday’s close.

 

"The Myth of the Secret Genius"

I was sorting through my draft folder when I came across this post by Brian Klaas. I'm embarrassed that I didn't get around to posting this when I first saw it. It's a natural fit with our ongoing Ithuvania thread. 

Fortunately, it's more relevant now than when it first came out.

But those who doubt The Secret Geniuses, or express skepticism about their methods or their madness, must simply not be smart enough to see the bigger picture. If you question the Secret Geniuses, then all you’re doing is exposing yourself as one of the stupid proles, someone unable or unwilling to Think Big.

If you can’t understand why it was secretly smart for Elon Musk to pick a fight with the advertisers who used to give Twitter billions of dollars of annual revenue, well then you’ll just have to live with the fact that you’re too conventional and too conformist. We pity you for not seeing the bigger picture, they say.

...

But there’s something else going with the Secret Geniuses. Venture capital is a world where the most effective way to get investors is to convince them you’re different—a one in a million visionary. This phenomenon is amplified because many investors are assuming that most of their bets will fail, but that every so often, one of their bets will produce a fat tail that leads to vast riches, as was the case with Facebook. When that happens, all the previous failures become meaningless, because the billions produced by the one success dwarfs the millions poured into the businesses that collapsed.

Everyone in venture capital is looking for their Secret Genius.

So, what’s the rational thing for an ambitious, money-obsessed narcissist with a start-up to do? Sell them one. Give them the myth they want to believe.

Elizabeth Holmes, I suspect, knew she wasn’t really a Secret Genius, and could admit to herself that what she was selling was fraudulent, a failed technology dressed up in technical language that would trick people into believing it was the real deal, with the help of her confident smoke and mirror show. Elon Musk, I suspect, is high on his own supply and takes it as granted that everyone else (and especially his critics) is much stupider than he is.

But whether the Secret Geniuses believe they are geniuses or not doesn’t really matter. What matters is what their investors think.

That dynamic creates strong incentives for already eccentric narcissists to indulge their worst impulses. Set yourself apart from the crowd in ways that dazzle people and you can create a self-fulfilling prophecy with other people’s money. Using signalling theory, the Secret Geniuses develop ways to stand out, hoping it will convince doubters that they just don’t understand the genius (this is likely why Mark Zuckerberg has a terrible haircut mimicking Julius Caesar and always wears the same shirt).

 ...

Power, like wealth, is a magnet that attracts dangerous hucksters, and then rewards them. As I’ve written in my latest book, Corruptible, three traits known as the Dark Triad tend to, unfortunately, produce success. The three traits (Machiavellianism, narcissism, and being a psychopath) are disproportionately correlated with obtaining power, and by extension, wealth. I’ll leave it to your judgment to determine how many of the three apply to, say, Elon Musk.

Then, there’s overconfidence and over-promising. For whatever reason, we almost never punish rich people who over-promise and under-deliver. 

...

The Gates Foundation, which rewards grant money to applicants, subjected its awards to scrutiny and found something fascinating. The grant applications that promised the moon were more likely to get funding than those that promised more modest, realistic results. But when the proposals actually got funded, those that over-promised frequently delivered similar results to those who accurately depicted their research.

The language used mattered a lot. If someone referred to their research as “innovative,” or “game-changing,” for example, they would be more likely to get funding than if someone accurately depicted it as an important, but incremental step toward better knowledge. And guess who tended to use over-confident language that promised the moon?

Men.

The study therefore showed that one reason for gender bias in grantmaking isn’t due exclusively to sexism, but also to the fact that men were more willing to sell a big idea with more expansive, over-confident promises.

Now, imagine that instead of the more sterile world of Gates Foundation grant applications, you’re sitting around a table in Silicon Valley with a bunch of super-rich tech bro investors who are looking for their Secret Genius. Who do you think gets the most money?

 

You can hardly blame the New York Times for trusting Netflix. It's not like the company has a record of pulling this crap for more than a decade.

I kid, of course.

From CJR via Andrew Gelman,  

When stock markets closed on January 19, 2021, Netflix posted a press release with its end-of-year financial results. Business is booming, the message went. About a year into the coronavirus pandemic, the company had provided “escape, connection, and joy” to more than two hundred million subscribers. A New York Times journalist had an hour to review Netflix’s earnings report: eleven pages, half corporate-speak, half dense tables filled with accounting metrics—some of them standard, some invented. During after-hours trading, Netflix stock began to rise.

The pressure was on to explain the numbers while standing firm against salesmanship. In its release, Netflix had highlighted operating income. That excluded hefty interest on its debt (the company had borrowed sixteen billion dollars to fund a spree of shows) and the expense of taxes (a year before, Netflix had quadrupled its profit by emptying a tax reserve that it had only recently stuffed). But Netflix’s finance whizzes had turned straw into gold. The Times story duly noted the company’s rising operating income, not the fact that profit was down 8 percent for the quarter—and the drop looked even steeper when compared with the burgeoning sales. (Netflix declined to comment for this piece.) Profit wasn’t discussed in the release; the number appeared as the bottom line of a required financial statement.

But in Silicon Valley, where Netflix is based, growth is king. The pandemic had delivered a boost to subscriptions and paused new productions; without crews to pay, Netflix had piled up extra cash. The company announced, in bold type, “We believe we no longer have a need to raise external financing for our day-to-day operations.” The Times noted that Netflix would still have ten billion to fifteen billion dollars in debt, but said that the company “made enough revenue to pay back those loans while maintaining its immense content budget.” Netflix now makes enough to repay its debt, the story went; “the gambit seems to have worked.”

The article was written, edited, and posted in seventy-eight minutes. Alas, it was wrong. Netflix, in fact, had said that it would pay off only the part of its debt coming due—a billion dollars—and “explore” using the rest of its cash to buy back its stock. (A Times spokesperson said that the paper stands behind its reporting.)

Netflix has been misrepresenting its performance and business model for about as long as it's been in the streaming business.

The two great traditions of creative accounting are found in Hollywood and Silicon Valley, so it is hardly surprising that the company that occupies the intersection in the Venn diagram has done some particularly interesting work. You can find plenty of stories about questionable reporting and dubious viewership metrics. There is, however, curiously little attention paid to the big lie that started it all.

The original Netflix narrative, the story that drove the stock to such spectacular heights and won over virtually all business and entertainment journalists covering the story (at least on the East Coast), was that of a tech visionary disrupting yet another industry and making the studios obsolete.

In defense of Netflix, the current system, where a handful of companies have a stranglehold on the industry, is desperately in need of some disruption. To the extent that this was a conflict between Netflix and Disney, Warner, et al., there's really not a side to root for. It's more of a Godzilla-versus-Rodan situation. All you can do is sit back and enjoy the destruction.

The citizens of Tokyo, in this analogy, might be the investors who bought the stock based on the claim that Netflix was about to produce so much high-quality programming that they would be completely self-sufficient in a few years. The company would have so much great stuff that they could drop everyone else's movies and shows and their subscribers wouldn't mind.

The idea that Netflix was building a content library this massive was always absurd. The current IP landscape is a distillation of almost 100 years of shows, movies, characters, and franchises produced by an international industry. The best of these properties have held or even increased their value decade after decade. Furthermore, the secret to creating new valuable properties was—and is—essentially a black box. No one knows how to create the next Batman, James Bond, or Friends.

It was silly of these journalists to believe that Netflix could do this. It was stupid and negligent of them to believe that Netflix was actually trying.

Here was the dirty little secret of the first few years of Netflix's original programming: while convincing gullible souls at places like The New York Times that they were building this massive content library, they were, in fact, buying nothing. They didn't own House of Cards. They didn't own Orange Is the New Black. They didn't own Unbreakable Kimmy Schmidt. Other than the name "Netflix," they owned virtually nothing. It was true that they were spending billions of dollars producing new programming, but all they were getting for that money was the right to exclusively air those shows for a few years. If Netflix wanted to continue streaming these shows after the license agreement ran out, they would have to either pony up whatever the owners demanded or watch these shows move to other venues. Case in point: Daredevil and the rest of The Defenders are now available on Disney+.

This is a variation of one of the oldest scams in the book: passing off leases as ownership. A business projects an air of success and affluence by giving a false impression of sizable assets. After one of these operations collapses, it is commonly—and in this case, somewhat ironically—known as a house of cards.

Netflix showed no interest in actually acquiring IP until some West Coast journalists and a few obscure bloggers made this enough of a story for investors to start getting concerned. At that point, the company began to make a great show of buying programs outright, though even then the new policy had far more exceptions than Netflix would have people believe. To this day, subscribers spend most of their viewing hours on the service watching pre-existing content like NCIS, Suits, or Gilmore Girls. But even among original programming, many—if not most—of their biggest hits, such as Lucifer and She-Ra, are still owned by other companies.

Perhaps we can't blame Netflix too much for this and other distortions and misrepresentations. They were, after all, just following the age-old mantra of Silicon Valley: "Fake it till you make it." We can and should, however, blame respected and supposedly responsible journalists who continue to let themselves be suckered by the faking time and time again.

"First class tickets for ships that have sailed" -- a ten-years-ago-at-the-blog repost

 [A quick side note. Bob Chipman, a film critic and pop culture historian whose work I enjoy and which I cited recently is no longer with the Escapist. If you want to keep up with his work, you can check out his blog here.]

The following is a nice example of putting popular culture in a business context. It also relates to an ongoing discussion I've been having with Joseph.



Joseph and I were discussing this very point about collectibles a few weeks ago as part of a larger conversation about investments and compensation, specifically cases where people made decisions in the hope of events repeating despite the fact that they were almost certainly a one time payoffs.

Growing up in Arkansas my go-to example is the Walmart millionaire box boy. Years before the stock took off, Sam Walton's wife convinced him to start a program that rewarded employees with either stock or stock options. When the boom came, a number of long-term employees found themselves very well compensated. As a result, virtually everyone in the area either knew someone or knew someone who knew someone who had become a millionaire from working a fairly low-wage job at Walmart.

These stories floated around for decades. They helped enourmously with morale and recruitment. People will tolerate a great deal for the possibility of a multimillion dollar payday down the road, but of course the boom was a one time event. By the time that people heard about the multimillionaire box boys, the last one of these had already been minted.

Joseph and I both saw a similar phenomenon working for you high-growth company in the early part of the millennium. The corporate folklore was filled with examples of people who had either gotten tremendous payouts from stock options or who had gone from the bottom to the top ranks of the company with shocking speed . Interns and secretaries who had become millionaires and vice presidents in the space of a few years.

For the most part, these anecdotes were true but that was largely beside the point. A few years earlier the company had been a start up now it was a major corporation. The career path and compensation associated with that particular transition were huge but there was no way they could be replicated once the company had arrived.

Of course, these stories didn't just spread by themselves. The companies in question did their best to make sure their employees knew that in the past there have been big pay offs . The result was a kind of false compensation. "We are not saying that your menial job here will lead to great wealth and position, but it has happened before." It is probably not a coincidence that Walmart's increasing labor problems seem to have picked up steam as the legends of millionaire cashiers faded.

Still a better branding choice than "Soylent"

xAI calls its supercomputer Colossus. 

 
We could go back and forth about how much this is a joke or how much self-awareness it shows, but the main thing you should take away from this is that, as previously mentioned, Elon Musk and most of the other heralded Tech Messiahs got the vast majority of their ideas from postwar science fiction magazines, movies and TV shows.

Perhaps we should let Turing off the hook as well

A little while back, we came to the defense of Arthur Conan Doyle by pointing out that surprisingly many intellectuals and scientists including those of the caliber of Albert Einstein and Pierre Curie, believed in or were at least open to the possibility of the paranormal back in the late 19th and early 20th centuries, and that these beliefs were far more defensible 120 years ago than they are today.

Curie had company. William Crookes and fellow Nobel laureate Charles Richet were two of the many scientists who devoted a large part of the time to paranormal research. Albert Einstein wrote the preface to Mental Radio. Respected publications published serious discussions about psychic and supernatural phenomena. Not everyone was a believer, but it was rare to find people in the "absolutely, positively no-way" camp either.

Nor were the Curies the only ones to make a connection between the fantastic scientific discoveries of the day and the possibility of the paranormal. When Edison stumbled on the first radio transmitter back in the 1870s (that’s another story we need to get into), he wondered if it might explain telepathy. When the later debunked N-rays were announced, scientists speculated that they too might explain psychic phenomena.

When you are constantly bombarded with news of the seemingly magical—be it cylinders that capture voices, strange rays that let doctors see through flesh, or communications that somehow travel instantly through the air—it would probably seem foolhardy to prematurely dismiss the possibility of something outside of our range of knowledge.

We, on the other hand, have two large bodies of knowledge to draw on when evaluating claims of the supernatural. First, we have well over a century of paranormal research where, when you take out the frauds and the fatally flawed test designs, you find no support whatsoever for these claims. Second, we have a century of research into physics that has effectively ruled out any possibility of these forces causing ghosts to walk or psychics to tell you anything that couldn't be learned from a cold reading.

This still didn't explain why someone would still be making these claims in the middle of the last century: 

 ‘I assume that the reader is familiar with the idea of extra-sensory perception … telepathy, clairvoyance, precognition and psycho-kinesis. These disturbing phenomena seem to deny all our usual scientific ideas … Unfortunately the statistical evidence, at least for telepathy, is overwhelming … Once one has accepted them it does not seem a very big step to believe in ghosts and bogies.’

These words weren’t published in the pages of an obscure occult journal or declared at a secret parapsychology conference. They weren’t written by a Victorian spiritualist or a séance attendee. In fact, their author is Alan Turing, the father of computer science, and they appear in his seminal paper ‘Computing Machinery and Intelligence’ (1950), which describes the ‘imitation game’ (more commonly known as the ‘Turing test’) designed to establish whether a machine’s intelligence could be distinguished from that of a human.

The paper starts by setting up the now-famous thought experiment: a human, a machine, and an observer who asks questions. If the observer cannot work out which one is which based on their responses, the machine has passed the test: its intelligence is indistinguishable from that of a human mind. The vast majority of the paper addresses various objections against the experiment from mathematics, philosophy of mind, or from those sceptical about the power of computers.

But, about two-thirds of the way through the paper, Turing addresses an unexpected worry that might disrupt the imitation game: telepathy. If the human and the observer could communicate telepathically (which the machine supposedly could not do), then the test would fail. ‘This argument is to my mind quite a strong one,’ says Turing. In the end, he suggests that, for the test to work properly, the experiment must take place in a ‘telepathy-proof room’.

Why did Turing feel the need to talk about telepathy? Why did he consider extrasensory perception a serious objection to his thought experiment? And what about his peculiar mention of ghosts?

Matyáš Moravec, a lecturer in philosophy at Queen’s University Belfast, explains that Turing's beliefs may have been questionable at the time, they weren't all that unconventional in the mid-century halls of Cambridge. 

 In 1882, a group of scholars associated with Trinity College, Cambridge, founded the Society for Psychical Research, a learned society whose aim was to study these phenomena with scientific rigour. Over the course of its existence, the society counted among its members some of the brightest minds of the time, including the author Arthur Conan Doyle and the physicist J J Thomson. Its members displayed various levels of commitment to the phenomena of the séance room. Some were very committed, such as the physicist Oliver Lodge, who wrote a highly influential book containing records of séances where he communicated with his son who was killed in action during the First World War. Some were much more sceptical, like Eleanor Sidgwick, a physics researcher and the principal of Newnham College, Cambridge, or John Venn, the inventor of the Venn diagram. Despite the differences in their level of commitment to the reality of paranormal occurrences, this heterogeneous group of scholars agreed that these phenomena deserved scholarly attention.

A high number of professional philosophers either joined the society or engaged with its findings. The ethicist Henry Sidgwick (Eleanor’s husband) was one of its founders, together with F W H Myers, the inventor of the word ‘telepathy’ and an unusually committed member: according to at least one report, he continued his involvement after his death, sending messages from the beyond via various mediums (a sort of extreme version of the professor emeritus who occasionally drops by the department). Such esteemed philosophers as Henri Bergson, William James and F C S Schiller were each elected president of the society. Many other philosophers, such as May Sinclair, were regular members.

...

Serialism begins with the premise that anything that moves must move in time. For example, a car moving on a road is in one place at t₁, and at another place further up the road at t₂. If there was no time, it would be hard to describe the car as ‘moving’ at all. But, Dunne argued, time itself moves. It would be strange to say that time does not move. It cannot stand still. (The British philosopher Antony Flew noted that Dunne does not distinguish straightforward spatial motion from the elusive ‘flow’ of time, which is the main blunder that eventually leads to his bizarre theory of time.) So, Dunne thought, there must be a meta-time or hypertime, a higher series of ‘time above time’ describing the movement of the time we inhabit. But this ‘time above time’ must also move (otherwise it would not be time). So, there must be a third series of time, and so on to infinity. Dunne believed that, when we dream, our minds can gain access to these higher series of times, some of which contain future events.

The book became a bestseller. It was republished in several editions and influenced several key 20th-century writers, including Jorge Luis Borges, C S Lewis, J B Priestley and J R R Tolkien. The physicist Arthur Eddington wrote an approving letter to Dunne, which was published in later editions of the book. The wider public became fascinated with the idea of ‘seeing the future’, to the point where the phrase ‘Dunne dream’ became a shorthand for any precognitive dream.

By contrast, the book was ridiculed in academic circles. Not so much because Dunne believed in precognitive dreams (as a matter of fact, many academics thought that the catalogue he provided of these dreams was the only valuable thing about his book [This strikes me as particularly significant. Lots of intellectuals accepted the idea that precognition was real of needed to be studied; they were just skeptical of that particular explanation. -- MP]), but because of his bizarre theory of time. One reviewer in The Journal of Philosophy said that it was very hard to take it seriously, another in Nature considered the possibility that the book was just a practical joke, and an unimpressed philosopher called serialism a ‘logical extravaganza’.

Broad was the only professional philosopher to seriously engage with Dunne. Trinity College holds Broad’s own copies of Dunne’s books, whose margins are covered in extensive notes containing suggestions for fixing serialism and using it to generate a philosophically robust explanation of precognitions. He even published a stand-alone paper on Dunne in the journal Philosophy in 1935, and Dunne features in several places of his magnum opus, Examination of McTaggart’s Philosophy (1933-8).

Broad addressed what might be called the ontological problem with precognitions. In the first half of the 20th century, one of the most widely accepted views of time was the ‘growing block’ theory, which says that the past exists, the present exists, but the future does not. This accords pretty well with our everyday intuitions about time, but poses a particular philosophical problem for the existence of precognitions. Say I foresee, in a dream, what happens next Saturday. Supposing the growing-block theory is true, next Saturday does not (yet) exist. So, what was it that I saw in the dream? How could I have seen something that does not exist?

The engagement with Dunne motivated Broad to propose one of the first ‘hypertime’ theories. This is a group of theories that claim that time has two (or more) dimensions, similar to the way that the space we inhabit is three-dimensional. In Broad’s view, one dimension had a growing-block structure. In this dimension, the future does not exist. But, he suggested, there could also be a second dimension of time in which the future does exist, and so contains the foreseen event. In a precognitive dream, we gain access to it. This is a streamlining of Dunne’s logical extravaganza: Broad got rid of the idea that time itself must move through time, and ditched the ‘infinite’ series of dimensions. Two dimensions are enough.

 

 

 

 

 

 

Noah may be overthinking "We'll do the Flintstones but in the future, with robots instead of dinosaurs."

I wrote this about a year ago but it somehow disappeared into the draft folder shortly after Noah Smith wrote this post. Fortunately, though, critiques of techno-optimism have remained as relevant as ever (and dovetails nicely with last Friday's post).

This is why The Jetsons focused on robots doing housework; they knew that this would be one of the technological innovations that would have the most immediate and unambiguously positive impact on Americans’ quality of life — especially women, who at that time were even more disproportionately burdened with housework than they are now. Housework is a job we want the robots to take.

 

In the fifties and sixties, ABC was a perennial third out of three, so it was open to ideas like primetime cartoons. This paid off with the Flintstones, a big hit by the network's standards, so an internal rip-off was inevitable. 

Here's what we said about it in a previous post:

When people talk about the Jetsons having one season, they are talking about its original prime time run. ABC in the 50s and 60s was more or less in the same position as Fox in the '90s, a perennial last place and a bit of a joke. This was partially due to the network's origin. It was carved off from NBC as the result of an antitrust action from the government against NBC. Like Fox, ABC tried a lot of out of the box programming including prime time animation. They had a moderate hit with The Flintstones which ran for a number of years. The Jetsons was an attempt to cash in on what they hoped would be a trend. (Jonny Quest also had its initial run in prime time on the network.) By the late Sixties, no one in the target audience had any idea that any of these shows had ever been anything but Saturday morning cartoons.

In addition to being inspired by The Flintstones which was itself a rip-off of The Honeymooners, The Jetsons lifted most of their premise and many of their gags from the still well remembered at the time movie series Blondie, even going so far as to cast the same lead actress.

Lifting characters and premises from other people's intellectual property was a bit of a Hanna-Barbera specialty. While it was common practice for the all cartoon studios to toss in celebrity caricatures and other references/homages, (see Andrew Gelman's class Foghorn Leghorn), HB took things to an extreme, seldom producing anything that wasn't at least partially lifted from familiar pop culture. For example, Scooby-Doo was a mashup of Dobie Gillis (particularly Bob Denver's character Maynard G, Krebs) and the fake haunted house genre. (Shaggy is also class Foghorn Leghorn).

If you're looking for where a Hanna-Barbera concept came from, you should always start (and probably stop) with the familiar pop culture of the time. In addition to the Flintstones, that included wise-cracking housekeepers. Hazel, which had debuted the year before, was the fourth highest rated show in the country. The studio's decision to include a robot maid is not really a head-scratcher.

 I know this all seems rather trivial given the news recently, particularly since Noah Smith is a sharp guy, and we're going to be picking on him quite a bit over more substantial issues in the coming weeks, but the techno-optimist crowd, led by people like Marc Andreessen and Elon Musk, has amassed considerable economic and political power and exerts a wildly disproportionate influence on the discourse, and for those reasons alone, it is essential that we understand this movement and where it's coming from. 

When you take a deep dive into this, you soon arrive at the frightening realization that our supposedly serious discussions of the future are mainly based on adolescent post-war science fiction. (I should probably try to work the vanity aerospace industry in here somewhere.) Arguments about the coming wave of technology based on Saturday morning memories of a 65-year-old cartoon show are absolutely on-brand.

Every picture tells a story

 A bit of context. Substantially more people died in the Eaton fire than in the Palisades fire. Far more people were left homeless in Altadena than in Pacific Palisades. In terms of the rest of LA, it was Eaton that came dangerously close to highly populated areas and could have racked up a horrific death toll had things gone differently. 

What happened in Altadena was many times more newsworthy than what happened in Pacific Palisades. There was only one reason to talk mainly about the latter: that neighborhood was where the rich and famous people lived.

"The SAT Gave Me Hope"

Back in 2014, the New York Times published a brief memoir about taking the SAT and how unfair it had been. This was another case of the paper of record bravely leaping on the bandwagon -- almost everyone was going after standardized tests at the time. Absent from the opinion piece was any mention of the fact that the memoirist was attending one of the most elite prep schools in the country (the kind of place where you see names like du Pont on the alumni rolls) when she took the test.

Ten years later, after the tide of public opinion on the test had started to shift yet again, the NYT published another SAT memoir, this time from a woman whose situation and experience were very different. It's definitely a story you should read.

Opinion | The SAT Gave Me Hope
Emi Nietfeld

For many of us, standardized tests provided our one shot to prove our potential, despite the obstacles in our lives or the untidy pasts we had. We found solace in the objectivity of a hard number and a process that — unlike many things in our lives — we could control. I will always feel tenderness toward the Scantron sheets that unlocked higher education and a better life.

Growing up, I fantasized about escaping the chaos of my family for the peace of a grassy quad. Both my parents had mental health issues. My adolescence was its own mess. Over two years I took a dozen psychiatric drugs while attending four different high school programs. At 14, I was sent to a locked facility where my education consisted of work sheets and reading aloud in an on-site classroom. In a life skills class, we learned how to get our G.E.D.s. My college dreams began to seem like delusions.

Then one afternoon a staff member handed me a library copy of “Barron’s Guide to the ACT.” I leafed through the onionskin pages and felt a thunderclap of possibility. I couldn’t go to the bathroom without permission, let alone take Advanced Placement Latin or play water polo or do something else that would impress elite colleges. But I could teach myself the years of math I’d missed while switching schools and improve my life in this one specific way.

After nine months in the institution, I entered foster care. I started my sophomore year at yet another high school, only to have my foster parents shuffle my course load at midyear, when they decided Advanced Placement classes were bad for me. In part because of academic instability like this, only 3 to 4 percent of former foster youth get a four-year college degree.

Later I bounced between friends’ sofas and the back seat of my rusty Corolla, using my new-to-me SAT prep book as a pillow. I had no idea when I’d next shower, but I could crack open practice problems and dip into a meditative trance. For those moments, everything was still, the terror of my daily life softened by the fantasy that my efforts might land me in a dorm room of my own, with endless hot water and an extra-long twin bed.

...

The hope these exams instilled in me wasn’t abstract: It manifested in hundreds of glossy brochures. After taking the PSAT in my junior year, universities that had received my score flooded me with letters urging me to apply. For once, I felt wanted. These marketing materials informed me that the top universities offered generous financial aid that would allow me to attend for free. I set my sights higher, despite my guidance counselor’s lack of faith.

Here's how her story turned out:

Emi Nietfeld is a writer and software engineer. After graduating from Harvard College in 2015, she worked at Google and Facebook. Her essays have appeared in The New York Times, The Rumpus, Vice, and other publications. She lives in New York City with her family.

And here's what we said eleven years ago:

This pool of those likely to gain is quite large. Having gone to a perfectly good but not outstanding public high school in the middle of the country, I can tell you that the best and often the only feasible way for most students to catch the eye of an elite college recruiter (with the possible exception of athletic accomplishment) is through high SAT scores. It is possible for a valedictorian from a no-name high school to get in to an Ivy League school without killer test scores, but they won't be pursued the way students who have broken 700 across the board on the SAT will. For a a lot of middle-class students, the SAT and ACT represent their best chances at a really prestigious school, not to mention the scholarships most Americans need to attend those schools.

Monday, March 24, 2014

SAT winners and losers

One thing I've noticed about the recent calls to end the SAT is that the test is framed entirely as an obstacle. At no point is there any suggestion that some students might have more educational opportunity because of the test. Obviously that can't be true. There is clearly a zero sum aspect to this. When someone bombs their SAT, Harvard does not reduce its admissions by one.

This pool of those likely to gain is quite large. Having gone to a perfectly good but not outstanding public high school in the middle of the country, I can tell you that the best and often the only feasible way for most students to catch the eye of an elite college recruiter (with the possible exception of athletic accomplishment) is through high SAT scores. It is possible for a valedictorian from a no-name high school to get in to an Ivy League school without killer test scores, but they won't be pursued the way students who have broken 700 across the board on the SAT will. For a a lot of middle-class students, the SAT and ACT represent their best chances at a really prestigious school, not to mention the scholarships most Americans need to attend those schools.

This suggest an interesting framework for looking at the likely winners and losers under the current SAT system. Let's define winners as those for whom the potential benefits of a very high score are larger than the potential downside from an average or below score and losers as the opposite.

What would these two groups tend to look like? We have already partially answered this question for the winners. They would come from no name public high schools. They would tend not live near a major academic center such as the Northeast or Central or Southern California (since proximity increases the chance of networking). They would be middle or lower income (or at least low enough for twenty or thirty thousand of annual tuition to be a significant hardship).

How about the losers by the standard? Remember these are people who would gain relatively little from a very high score. That rules out anyone not fairly well to do (most of the rest of us can really use a full ride scholarship). They would probably attend the kind of elite and very pricey prep schools that are expert at getting their students into top universities. They would have the support network of connections and role models that make the application process go much smoother.

We previously discussed the op-ed by Jennifer Finney Boylan. Boylan clearly saw herself as someone who was more likely to be hurt than helped by the SAT so it would be interesting to see how well her background matches the group above. A quick stop at Wikipedia reveals that, though Boylan has overcome many challenges in her life, academic hardship does not appear to have been one of them. At the time her anecdote took place, she was about to graduate from the Haverford School. Haverford is almost a living cliche of an elite prep school, one of those places where the rich and powerful graduate from and send their children to.

It's true that there are ways that people with money can gain an advantage on the SAT. There are, however, considerably more and more effective ways that people with money and position can gain an advantage in all of the other factors used to rank potential college applicants: grades; school standing; extracurricular activities; recommendations; connections; the daunting application process. Students in Boylan's position have massive advantages. You could make the case that, as a high school student competing for a spot in an prestigious university, the only time Boylan had to compete on a roughly even playing field was when she took the SAT and it is worth noting that she resents it to this day.

That said, I don't want to single Boylan out. My concern here is with the insularity of the elites in our society and with the way that certain media outlets, particularly the New York Times, have come to view the world from their vantage point.

At least he didn't call it 'crowd sourcing'

[While while looking for notes I'd made for last week's Hitchcock/Lovecraft post, I search for that author's name and this popped up. I wrote it twelve years ago but for some reason never got around to hitting publish. I've shifted a bit in my feelings about these writers, but for the most part, the following still stands.]  

I came across this piece by Jess Nevins as part of a silly they're-trying-to-suppress-Lovecraft thread on a chat room that will remain linkless. Overall, I thought it was pretty good, but this passage bothered me for a couple of reasons. First, of course, was the trendy and not all that apt use of 'open-source.' Second was how close this comes to, for me, the most interesting part of the Lovecraft phenomena before veering away:

"The question of why Lovecraft gained in popularity after his death and Clark Ashton Smith or Algernon Blackwood did not is slightly more complicated. Lovecraft escaped the fate of the vast majority of writers — obscurity, to a greater or lesser degree — through several extra-literary events. Luckhurst only alludes to Lovecraft’s letter writing, but it was critical in establishing Lovecraft as a literary presence to his contemporaries. Lovecraft was an extraordinary correspondent, writing an estimated hundred thousand letters in his lifetime, to fans and fellow writers, especially those working for the pulp Weird Tales. Decades before the social media, Lovecraft used letter writing to create a presence for himself in the consciousness of fans and writers and to create the social capital that paid off after his death.

"Too, Lovecraft was the first author to create an open-source fictional universe. The crossover, the meeting between two or more characters from discrete texts, is nearly as old as human culture, beginning with the Greeks if not the Sumerians. The idea of a fictional universe open to any creator who wants to take part in it is considerably newer. French authors like Verne [*] and Balzac had created the idea of a single universe linked through multiple texts, and following them, the dime novels and story papers of the late nineteenth and early twentieth centuries had established the idea of ongoing fictional universes, but those universes were limited to magazines published by the original stories’ publishers. It was Lovecraft who first created a fictional universe that anyone was welcome to take part in. Both during his lifetime and immediately afterward, other authors made use of Lovecraft’s ideas and creations in their own stories and novels. Lovecraft’s generosity with his own creations ultimately gave them a longevity that other, better writers’ ideas and characters did not have."

The open-source line seems rather silly both because this sort of thing had been going on for years and because it doesn't really describe the Lovecraft Circle. As for precedents, characters without clear owners (particularly from history, folklore and fakelore) were created by open groups of writers building on each others' ideas. For just one of the examples that preceded the Lovecraft Circle, check out Pecos Bill.

Some Lovecraft scholar might call me on this, but the Circle seemed to have mainly been established (Clark Ashton Smith, Robert E. Howard) or in a few cases promising (Robert Bloch) writers with a previous epistolary relationship with Lovecraft rather than something open to anyone. It was, nonetheless, an extraordinary bit of literary symbiosis organized around Lovecraft's impressive strengths and severe limitations.

Put bluntly, Lovecraft was an otherwise mediocre writer capable of moments of brilliance. His stories often had the impression of being rough drafts or, in the case of The Call of Cthulhu, notes for a story (critic E.F. Bleiler aptly called Cthulhu "a fragmented essay with narrative inclusions"). Lovecraft constantly produced wonderful elements but his finished works tended to be less than the sum of their parts.Writers like Howard could use these ideas to their fullest potential and by doing so could promote Lovecraft far more effectively.

Just to be clear, Lovecraft was a genuinely collaborative spirit, eager to participate and supportive of other writers (qualities probably enhanced by his association with the amateur press movement) and there was more to the Circle than just picking through Lovecraft's ideas. These were gifted people working in a period of great literary exploration that extended from high culture to genre fiction and the Circle's experiment in literary support and cross-fertilization is notable even given the standards of the time.



* Not exactly a consistent one. Thanks to a deeply muddled chronology, Mysterious Island takes place both before and after Twenty Thousand Leagues.

I tried to come up with a snarky title, but I was hard-pressed to top "timeless appeal" -- another entry in our Adventures in IP thread

Not the worst IP proposal for a universe we've seen recently (remind me to talk about the return of Atlas Comics), but probably the most embarrassing to come out of a major production house (Legendary is the company behind, among other things, Dune).

 From Reactor:

Akiva Goldsman, the writer and producer involved with myriad film and TV projects including the recent Star Trek shows, Doctor Sleep, I, Robot, and Batman & Robin, is setting his eyes toward Irwin Allen’s 1960s sci-fi television shows Voyage to the Bottom of the Sea, Land of the Giants, and The Time Tunnel.

According to Deadline, Goldsman is working with Legendary Television to create “a unified vision for these stories, bringing modern sensibilities to their timeless appeal, and expanding upon his success in revitalizing the Star Trek universe.”

 

For those of you who have not wasted large parts of your lives watching second-rate movies on bad television, Irwin Allen was a producer mainly active in the '60s and '70s. He became famous for producing a string of disaster films, starting with The Poseidon Adventure—probably his best film—and The Towering Inferno. Today, however, he is best known for producing Lost in Space, a show that is largely remembered because a guest star, Jonathan Harris, decided to start rewriting his lines in a successful effort to avoid being written out of the show. (Harris's account has been confirmed by numerous sources, including his co-star Billy Mumy.)

Lost in Space was the second of four science fiction shows Allen produced in the '60s, the other three being Voyage to the Bottom of the Sea (based on a profoundly silly but successful feature film that Allen produced and directed), The Time Tunnel, and Land of the Giants. The shows were not, by any standard, a "universe," but thanks to Allen's heavy recycling of sets, props, and costumes—and his already notorious overreliance on stock footage—they all tended to look the same.

The drive to accumulate intellectual property with any name recognition whatsoever has been going on for decades, particularly on the part of Disney and Warner Bros. This kicked into even higher gear with the emergence of the Marvel Cinematic Universe, for at least a few reasons. First, of course, were the billion-dollar-plus box office takes of these movies. Perhaps more importantly, though, it showed that lesser IP could be turned into major franchises. (Characters like Iron Man and Thor were decidedly second-tier before the MCU made them stars. The only reason Marvel gave them a chance was because the company had previously sold off the rights to their biggest names—the Fantastic Four, the X-Men, and Spider-Man.) Finally, the "universe" approach offered incredible opportunities for synergy. The critical and commercial success of the reimagined Battlestar Galactica added to the excitement.

So far, no attempt to recapture that magic has succeeded. DC has had decidedly mixed results. The Universal MonsterVerse basically died in its crib. The attempt to tie all of the Bond films together with Spectre got an overwhelmingly hostile reaction. Even Marvel has stumbled trying to come up with a second act after the Infinity Saga. Nonetheless, studios continue to dig up properties that are more and more obscure—and less and less suitable for revival.

The non-Lost in Space Irwin Allen shows are around 60 years old and were largely forgotten by the end of the decade. There are no plot elements or characters that lend themselves to adaptation, nor is there anything about the shows that suggests they should share a common universe.

 Is it possible to make a hit, even a hit that also happens to be a genuinely good piece of work? Of course it is. Have talented people in front of and behind the cameras saved studios from the consequences of bad executive decisions? Countless times. But make no mistake, that sound you hear in the background when you read a story about someone acquiring an increasingly obscure piece of IP is the scraping of the bottom of the barrel.

How can we possibly hope to rebuild after losing more than one half of a percent of our housing?

 Two months later and the Wall Street Journal is still pushing the drama (not to mention a couple of its favorite narratives).

Rebuilding Los Angeles Is California’s Economic Moment of Truth

As I've said before, I don't want to minimize the loss and personal tragedy experienced by the residents of Altadena and Pacific Palisades, but this has just gotten silly.

This is not San Francisco after the earthquake. The combined population of the unincorporated L.A. County community of Altadena and the L.A. City neighborhood of Pacific Palisades was somewhere around 65,000, with about two-thirds of them living in the Altadena. That's a lot of people experiencing a great deal of human suffering, but we have to keep some sense of proportion. Los Angeles County has around 10 million people. 

Other than four or so days of bad air and some admittedly scary reporting around the possibility of things spreading into much more densely populated areas, the fires had no direct impact on the vast majority of Angelenos. Other than some burn scars on some of the mountains, most of us haven't even seen any signs of the fires. To say that life goes on would be a massive understatement.

It would take some work to check, but it certainly seems like the press forgot about Hurricane Helene faster than they forgot about the L.A. fires, despite that storm killing hundreds and leaving hundreds of thousands displaced, though, in defense of the editors and reporters covering that other story, almost none of those houses belonged to movie stars.

Note to Elon: When people are accusing you of being a Nazi, blaming it on a George Soros conspiracy may not be the smartest move.

It's not often that I recommend a Motley Fool article over a Lawyers, Guns & Money post, particularly not one by Scott Lemieux, but these are strange times.

The markets, in general, have been doing horribly as of late, but Tesla is in a class of its own. Yesterday, the stock slid more than 15%, bringing it down more than 40% year to date. Most of the coverage, including the LGM piece, has stopped there, and if that were the whole story, the situation wouldn't be as bad as it sounds for Elon Musk, whose fortune overwhelmingly depends on the value of Tesla stock. Even with the ugliness of the past couple of months, the stock is still up almost 25% for the year. I'm sure that as you read this, there are Musk fans out there arguing that things are just returning to normal after the spike that followed the news of the Musk-Trump alliance and that things will level off when the company goes back to trading on fundamentals.

There are, however, two numbers that most writers are ignoring—numbers that have very disturbing implications for investors in the company.

108 and 21.

Tesla is a mature company. If it were a person, it could legally buy its own drinks. It also, even after yesterday's drop, has a price-to-earnings ratio over 100. That's about four times as much as you would expect from a mature tech company like Amazon or Facebook. It's about ten times as much as you would expect from a car company. Tesla is still priced like a start up.

Musk tried to reassure investors by telling them he believed a 1,000% increase in profits was possible over the next five years. Even with the "possible" qualifier, this would be an awfully ambitious claim, even for a company that was doing well. But Tesla's vehicle delivery numbers actually shrank in 2024, and 2025 was already looking to be worse before the head of the company—and retroactive founder—aggressively started destroying the brand. The company has a tiny number of badly received new products in the pipeline. The market is becoming more competitive, particularly with the rise of BYD. 

Now add on the branding disaster. Tesla owners are so embarrassed that they've been seen rebadging their once-trendy sedans and SUVs with the logos of other, less controversial carmakers. "Swastikar" is trending and producing some wonderful social media content—and some very pissed-off responses from fanboys. An ad campaign in Britain features the slogan: "Goes from 0 to 1939 in 3 seconds."

Musk's reaction may not be helping.

Unsurprisingly, Musk has disparaged Tesla Takedown as something astroturfed by wealthy liberals (and conflated the peaceful movement with attacks in which suspected arsonists threw Molotov cocktails at dealerships). On Saturday, he claimed without evidence on X that an “investigation” of some kind had revealed that wealthy philanthropists including George Soros, Reid Hoffman, and Leah Hunt-Hendrix were funding the groups behind Tesla protests through the Democratic fundraising platform ActBlue. Aside from misrepresenting how ActBlue works — it doesn’t fund anything but is rather a system through which donors can send money to Democratic political candidates and liberal organizations — Musk also pointed the finger at two more supposed financiers of Tesla Takedown, Herbert Sandler and Patricia Bauman, who died in 2019 and 2024, respectively.  

[Hoffman's take on Musk is especially insightful.]

But perhaps the most remarkable/saddest part of Elon Musk's 1,000% growth claim is that even if he could do it, it would only bring Tesla's market cap in line with other auto manufacturers. It's a situation where you need to win the lottery just to break even.