The end of the networks

A few years ago, faced with not one but two existential technological threats, industry observers started talking about the possible death of network television and the highly likely death of at least one of the majors.

In response, the networks panicked and released an enormous and embarrassing slate of new shows that demonstrated they had not only lost the ability to entertain and innovate, but to pander and steal with any degree of success. It was as if they were determined to prove all of the naysayers correct.

Continued below the break...

More on Google not not being evil

The Google/New America story we discussed last week continues to reverberate. I'll probably come back to this with a points-to-remember post on Google (and possibly something on the foundation as well). In the meantime, here are excerpts of some articles you might want to check out if you're following story.

As you might expect, Gizmodo has been all over this. Here's an account by Rhett Jones of how Google appears to have used its position to squelch a potential rival to Chrome.

While that sort of practice could be seen as fair game in the business world, Tetzchner says that he recently ran into a more problematic situation with Google. Vivaldi’s account with the Google AdWords advertising network was mysteriously suspended just a few days after he gave an interview to Wired in which he was critical of the company’s privacy practices. He writes:

When we reached out to Google to resolve the issue, we got a clarification masqueraded in the form of vague terms and conditions, some of which, they admitted themselves, were not a “hard” requirement. In exchange for being reinstated in Google’s ad network, their in-house specialists dictated how we should arrange content on our own website and how we should communicate information to our users.

He claims it took about three months to resolve all of Google’s “unreasonable demands,” and he believes that its monopolistic tendencies have reached the point “where regulation is needed.” He didn’t outline what these specific demands were so we reached out for clarification. A Vivaldi spokesperson sent us the following explanation:

They asked us to add an end-user license agreement (EULA) to our website. Which we did – only to get another pushback. Now, Google was asking us to add EULA “within the frame of every download button.” This, they later admitted, was not a “hard requirement” and yet somehow it was enough to keep our account suspended. They also asked us to add detailed information about uninstalling Vivaldi – a requirement they didn’t have direct guidelines on in their help articles. Admitting to that, they wrote to us that they “rely on the advertisers to take responsibility when advertising with us, hence reading up on and following our policy guidelines.” Fair point, if only these policies were clear and available – or if Google lead by example and added EULA “within the frame of every download button” on Chrome’s landing pages. If that wasn’t enough, it took them over a month to approve us as an “authoritative distribution site for free desktop software – Vivaldi.”
The fact that their specialists are dictating how and where we should place our content on our own website is very difficult to fathom. They do not spell out their terms and conditions in the first place and is case by case which is strange.

Three months of work to get a company reinstated in an ad program does sound a bit outrageous—so outrageous that one would probably feel inclined to no longer do business with the company that gives its customers so many headaches. But Vivaldi really doesn’t have a choice, Google controls 75.8 percent of the search ad market. To cut off Google means cutting off three-quarters of the web.

Gizmodo also ran this striking first-person account by Kashmir Hill of how Google used its dominance in search to pressure websites into helping promote Google's attempt at launching a social network, then pressured Forbes into killing a story revealing the practice.

I was working for Forbes at the time, and was new to my job. In addition to writing and reporting, I helped run social media there, so I got pulled into a meeting with Google salespeople about Google’s then-new social network, Plus.

The Google salespeople were encouraging Forbes to add Plus’s “+1" social buttons to articles on the site, alongside the Facebook Like button and the Reddit share button. They said it was important to do because the Plus recommendations would be a factor in search results—a crucial source of traffic to publishers.

This sounded like a news story to me. Google’s dominance in search and news give it tremendous power over publishers. By tying search results to the use of Plus, Google was using that muscle to force people to promote its social network.

I asked the Google people if I understood correctly: If a publisher didn’t put a +1 button on the page, its search results would suffer? The answer was yes.

After the meeting, I approached Google’s public relations team as a reporter, told them I’d been in the meeting, and asked if I understood correctly. The press office confirmed it, though they preferred to say the Plus button “influences the ranking.” They didn’t deny what their sales people told me: If you don’t feature the +1 button, your stories will be harder to find with Google.

With that, I published a story headlined, “Stick Google Plus Buttons On Your Pages, Or Your Search Traffic Suffers,” that included bits of conversation from the meeting.

The Google guys explained how the new recommendation system will be a factor in search. “Universally, or just among Google Plus friends?” I asked. ‘Universal’ was the answer. “So if Forbes doesn’t put +1 buttons on its pages, it will suffer in search rankings?” I asked. Google guy says he wouldn’t phrase it that way, but basically yes.

(An internet marketing group scraped the story after it was published and a version can still be found here.)

Google promptly flipped out. This was in 2011, around the same time that a congressional antitrust committee was looking into whether the company was abusing its powers.

Google never challenged the accuracy of the reporting. Instead, a Google spokesperson told me that I needed to unpublish the story because the meeting had been confidential, and the information discussed there had been subject to a non-disclosure agreement between Google and Forbes. (I had signed no such agreement, hadn’t been told the meeting was confidential, and had identified myself as a journalist.)

It escalated quickly from there. I was told by my higher-ups at Forbes that Google representatives called them saying that the article was problematic and had to come down. The implication was that it might have consequences for Forbes, a troubling possibility given how much traffic came through Google searches and Google News.

I thought it was an important story, but I didn’t want to cause problems for my employer. And if the other participants in the meeting had in fact been covered by an NDA, I could understand why Google would object to the story.

Given that I’d gone to the Google PR team before publishing, and it was already out in the world, I felt it made more sense to keep the story up. Ultimately, though, after continued pressure from my bosses, I took the piece down—a decision I will always regret. Forbes declined comment about this.

Finally, here is a selection from a thoughtful piece from Josh Marshall. Not surprisingly, TPM has also done a first-rate job covering this.

A Serf on Google’s Farm by Josh Marshall

It’s great that all this stuff is coming out. But what is more interesting to me than the instances of bullying are the more workaday and seemingly benign mechanisms of Google’s power. If you have extreme power, when things get dicey, you will tend to abuse that power. That’s not surprising. It’s human nature. What’s interesting and important is the nature of the power itself and what undergirds it. Don’t get me wrong. The abuses are very important. But extreme concentrations of power will almost always be abused. The temptations are too great. But what is the nature of the power itself?

...

What I’ve known for some time – but which became even more clear to me in my talk with Barry Lynn on Monday – is that few publishers really want to talk about the depths or mechanics of Google’s role in news publishing. Some of this is secrecy about proprietary information; most of it is that Google could destroy or profoundly damage most publications if it wanted to. So why rock the boat?

…

So let’s go down the list: 1) The system for running ads, 2) the top purchaser of ads, 3) the most pervasive audience data service, 4) all search, 5) our email.

...

But here’s where the rubber really meets the road. The publishers use DoubleClick. The big advertisers use DoubleClick. The big global advertising holding companies use Doubleclick. Everybody at every point in the industry is wired into DoubleClick. Here’s how they all play together. The adserving (Doubleclick) is like the road. (Adexchange) is the biggest car on the road. But only AdExchange gets full visibility into what’s available. (There’s lot of details here and argument about just what Google does and doesn’t know. But trust me on this. They keep the key information to themselves. This isn’t a suspicion. It’s the model.) So Google owns the road and gets first look at what’s on the road. Not only does Google own the road and makes the rules for the road, it has special privileges on the road. One of the ways it has special privileges is that it has all the data it gets from search, Google Analytics and Gmail. It also gets to make the first bid on every bit of inventory. Of course that’s critical. First dibs with more information than anyone else has access to. (Some exceptions to this. But that’s the big picture.) It’s good to be the king. It’s good to be a Google.

There’s more I’ll get to in a moment but the interplay between DoubleClick and Adexchange is so vastly important to the entirety of the web, digital publishing and the entire ad industry that it is almost impossible to overstate. Again. They own the road. They make the rules for the road. They get special privileges on the road with every new iteration of rules.

…

Now Google can say – and they are absolutely right – that every month they send checks for thousands and millions of dollars to countless publishers that make their journalism possible. And in general Google tends to be a relatively benign overlord. But as someone who a) knows the industry inside and out – down to the most nuts and bolts mechanics – b) someone who understands at least the rudiments of anti-trust law and monopoly economics and c) can write for a sizable audience, I can tell you this.: Google’s monopoly control is almost comically great. It’s a monopoly at every conceivable turn and consistently uses that market power to deepen its hold and increase its profits. Just the interplay between DoubleClick and Adexchange is textbook anti-competitive practices.

There’s one way that Google is better than Facebook. When Facebook is getting a bigger and bigger share of the advertising pie, that money is almost all going to Facebook. There are some small exceptions but that’s basically the case. When Google is making insane amounts of money on advertising, it’s not really the same since a huge amount of that advertising is running on websites which are getting a cut. Still, the big story is that Google and Facebook now have a dominant position in the entirety of the advertising ecosystem and are using their monopoly power to take more and more of the money for themselves.

We’re basically too small for Google to care about. So I wouldn’t say we’ve had any bad experiences with Google in the sense of Google trying to injure us or use its power against us. What we’ve experienced is a little different. Google is so big and so powerful that even when it’s trying to do something good, it can be dangerous and frightening.

Here’s an example.

With the events of recent months and years, Google is apparently now trying to weed out publishers that are using its money streams and architecture to publish hate speech. Certainly you’d probably be unhappy to hear that Stormfront was funded by ads run through Google. I’m not saying that’s happening. I’m just giving you a sense of what they are apparently trying to combat. Over the last several months we’ve gotten a few notifications from Google telling us that certain pages of ours were penalized for ‘violations’ of their ban for hate speech. When we looked at the pages they were talking about they were articles about white supremacist incidents. Most were tied to Dylann Roof’s mass murder in Charleston.

Now in practice all this meant was that two or three old stories about Dylann Roof could no longer run ads purchased through Google. I’d say it’s unlikely that loss to TPM amounted to even a cent a month. Totally meaningless. But here’s the catch. The way these warnings work and the way these particular warnings were worded, you get penalized enough times and then you’re blacklisted.

Now, certainly you’re figuring we could contact someone at Google and explain that we’re not publishing hate speech and racist violence. We’re reporting on it. Not really. We tried that. We got back a message from our rep not really understanding the distinction and cheerily telling us to try to operate within the no hate speech rules. And how many warnings until we’re blacklisted? Who knows?

If we were cut off, would that be Adexchange (the ads) or DoubleClick for Publishers (the road) or both? Who knows?

If the first stopped we’d lose a big chunk of money that wouldn’t put us out of business but would likely force us to retrench. If we were kicked off the road more than half of our total revenue would disappear instantly and would stay disappeared until we found a new road – i.e., a new ad serving service or technology. At a minimum that would be a devastating blow that would require us to find a totally different ad serving system, make major technical changes to the site to accommodate the new system and likely not be able to make as much from ads ever again. That’s not including some unknown period of time – certainly weeks at least – in which we went with literally no ad revenue.

Needless to say, the impact of this would be cataclysmic and could easily drive us out of business.

…

Of course, the real issue is the monopoly and how it applies to money. Is your favorite website laying off staff or ‘pivoting to video’. In most cases, the root cause is not entirely but to a significant degree driven by the platform monopolies – in this case, Google and Facebook – taking a bigger and bigger slice of the advertising dollars. It’s going to their profits and being taken away from publishers who of course are also trying to maximize their profits but do it through paying for journalism.

…

We could see this coming a few years ago. And we made a decisive and longterm push to restructure our business around subscriptions. So I’m confident we will be fine. But journalism is not fine right now. And journalism is only one industry the platform monopolies affect. Monopolies are bad for all the reasons people used to think they were bad. They raise costs. They stifle innovation. They lower wages. And they have perverse political effects too. Huge and entrenched concentrations of wealth create entrenched and dangerous locuses of political power.

"None had ever performed such wonderful things in so short a time"

One more from Mackay's Extraordinary Popular Delusions.

On the 29th of May, the stock had risen as high as five hundred, and about two-thirds of the government annuitants had exchanged the securities of the state for those of the South Sea Company. During the whole of the month of May the stock continued to rise, and on the 28th it was quoted at five hundred and fifty. In four days after this it took a prodigious leap, rising suddenly from five hundred and fifty to eight hundred and ninety. It was now the general opinion that the stock could rise no higher, and many persons took that opportunity of selling out, with a view of realising their profits. Many noblemen and persons in the train of the King, and about to accompany him to Hanover, were also anxious to sell out. So many sellers, and so few buyers, appeared in the Alley on the 3rd of June, that the stock fell at once from eight hundred and ninety to six hundred and forty. The directors were alarmed, and gave their agents orders to buy. Their efforts succeeded. Towards evening confidence was restored, and the stock advanced to seven hundred and fifty. It continued at this price, with some slight fluctuation, until the company closed their books on the 22nd of June.
 It would be needless and uninteresting to detail the various arts employed by the directors to keep up the price of stock. It will be sufficient to state that it finally rose to one thousand per cent. It was quoted at this price in the commencement of August. The bubble was then full-blown, and began to quiver and shake, preparatory to its bursting.
 Many of the government annuitants expressed dissatisfaction against the directors. They accused them of partiality in making out the lists for shares in each subscription. Further uneasiness was occasioned by its being generally known that Sir John Blunt, the chairman, and some others, had sold out. During the whole of the month of August the stock fell, and on the 2nd of September it was quoted at seven hundred only.
 The state of things now became alarming. To prevent, if possible, the utter extinction of public confidence in their proceedings, the directors summoned a general court of the whole corporation, to meet in Merchant Tailors' Hall, on the 8th of September. By nine o'clock in the morning, the room was filled to suffocation; Cheapside was blocked up by a crowd unable to gain admittance, and the greatest excitement prevailed. The directors and their friends mustered in great numbers. Sir John Fellowes, the sub-governor, was called to the chair. He acquainted the assembly with the cause of their meeting, read to them the several resolutions of the court of directors, and gave them an account of their proceedings; of the taking in the redeemable and unredeemable funds, and of the subscriptions in money. Mr. Secretary Craggs then made a short speech, wherein he commended the conduct of the directors, and urged that nothing could more effectually contribute to the bringing this scheme to perfection than union among themselves. He concluded with a motion for thanking the court of directors for their prudent and skilful management, and for desiring them to proceed in such manner as they should think most proper for the interest and advantage of the corporation. Mr. Hungerford, who had rendered himself very conspicuous in the House of Commons for his zeal in behalf of the South Sea Company, and who was shrewdly suspected to have been a considerable gainer by knowing the right time to sell out, was very magniloquent on this occasion. He said that he had seen the rise and fall, the decay and resurrection of many communities of this nature, but that, in his opinion, none had ever performed such wonderful things in so short a time as the South Sea Company. They had done more than the crown, the pulpit, or the bench could do. They had reconciled all parties in one common interest; they had laid asleep, if not wholly extinguished, all the domestic jars and animosities of the nation. By the rise of their stock, monied men had vastly increased their fortunes; country-gentlemen had seen the value of their lands doubled and trebled in their hands. They had at the same time done good to the Church, not a few of the reverend clergy having got great sums by the project. In short, they had enriched the whole nation, and he hoped they had not forgotten themselves. There was some hissing at the latter part of this speech, which for the extravagance of its eulogy was not far removed from satire; but the directors and their friends, and all the winners in the room, applauded vehemently. The Duke of Portland spoke in a similar strain, and expressed his great wonder why anybody should be dissatisfied: of course, he was a winner by his speculations, and in a condition similar to that of the fat alderman in Joe Miller's Jests, who, whenever he had eaten a good dinner, folded his hands upon his paunch, and expressed his doubts whether there could be a hungry man in the world.

Like we said before one more time, levels of automation, schedules of implementation

Apologies to regular readers who've been through this before, but probably the two most important concepts when discussing the potential impact of automated vehicles and certainly the most underused are SAE Autonomy Levels and the rate at which each of these levels will likely be adopted. If you follow the coverage closely you will routinely find, even in the most serious and respectable publications, arguments that mix levels of autonomy in the most careless way and, worse yet, promote as just-around-the-corner applications that require virtually every car on the road to be reliably using compatible level V technology.

Just to be clear, autonomy is coming and it is coming quickly, but when you hear promises of curing congestion by packing cars inches apart at high speeds or redesigned roads with narrower lanes and other human-driver-hostile features, consider the following article from Jalopnik.

For one thing, retail sales of fully-automated vehicles aren’t expected to begin until 2025 at the earliest, wrote Mitch Bainwol, in testimony to the Senate Committee on Commerce, Science and Transportation. Bainwol is the president and CEO of the Alliance of Automobile Manufacturers, a trade group that represents Ford, General Motors, FCA, BMW and more—automakers that produce 80 percent of cars on U.S. roads today. To put it plainly, he speaks for a significant chunk of the industry.
And in his written testimony ahead of the committee’s hearing on Wednesday, Bainwol offered a sober assessment of the situation.

Level 4 geo-fenced self-driving vehicles that can only be operated by an Automated Driving System will probably begin around 2021. But, retail sales to consumers of so-called Level 5 vehicles that can operate anywhere a person can drive a conventional vehicle today is unlikely to happen until around 2025 or after. Given how much vehicles cost and how long they last – more than 20 percent of cars on the road today were produced before 2002 – vehicles equipped with Level 5 systems will likely not be a majority of the fleet for three more decades. Ubiquity is not projected to occur for at least four decades largely due to the fact that over 260 million light duty vehicles are registered in the U.S.

Anyone who seriously researched this field, discussed the issues with researchers and made a sincere effort to find out what's going on, had a pretty good idea that this was the case. The credulous, sensationalistic, future-is-now reporting you've seen on the subject is not just misinformed it is irresponsible.

The following video clip should challenge cherished assumptions about Tesla, Silicon Valley, and self driving cars (it probably won't, but it should)

Before we go on, if you haven't, take a few moments and read this (we'll be quoting from it later but you really need to read the whole thing).




Obviously, we need to be careful about reading too much into this. There is a limit to how much you should take away from PR releases and tech reporters. There are, however, a few things we can conclude with some safety.

First, the system looks good. By most accounts it is the equal if not the superior of anything else on the road and, in one respect, it represents a significant step forward. Cadillac's system actually watches the driver, a considerably more sophisticated and  safer solution than Tesla and Mercedes Benz's nudge-the-wheel, and far more elegant than Google's just-give-up approach to the driver interface.

We can also conclude that that both the executives and the legal department of General Motors are fairly comfortable with this technology.When Tesla started rolling out its autonomous technology, there was always the possibility that Elon Musk was just betting big and playing reckless. That is certainly not the case here, which leads us to challenge one of the most cherished beliefs of the narrative.

The one thing everyone, from the trendiest tech blog to the New York Times, knew about autonomous vehicles was that the primary challenge was not technology and engineering, but the regulation and legislation.There would have to be massive and inevitably glacial changes in both of these areas before things could move forward. In other words, we couldn't get any cool stuff until those darn bureaucrats got out of our way. It was a narrative with almost archetypal appeal, but we can now say with some confidence it was never true. Multiple car companies are rolling out driverless options despite no great bureaucratic shift because bureaucrats were never a problem. Up until now, we didn't have driverless cars because the technology was not good enough.

Another cherished myth that is seriously threatened is that of the Silicon Valley Savior. It was often assumed that anything as wonderful as a car that drove itself would have to come from that most magical places. You couldn't expect anything wondrous and disruptive to come from a Detroit or a Stuttgart. Thus, the contributions of companies like Google and Tesla were given a wildly disproportionate amount of coverage. Even Apple, each managed to do nothing except prove that it wasn't up to the challenge of making cars, got listed as a major player. This was always a distortion. Silicon Valley never had a lock on the research or even a clear lead.

The deep-seated belief in a magical Silicon Valley populated by powerful chosen ones who could will great advances to being played a large role in the enormous valuation of Tesla. At the risk of oversimplifying, the reasoning went something like this: amazing things are about to happen with automobiles; this sort of thing comes out of Silicon Valley; the only Silicon Valley company/chosen one in position to do these things are Tesla and Elon Musk.

That said, there was a case to be made for Tesla reaping huge profits from autonomous vehicle technology. Here Goldfarb lays out the details:

So is Tesla the next Honda, or the next Webvan? If one believes that Tesla is worth more than Ford or GM, one better have a decent theory of how Tesla is making current capabilities obsolete, why incumbents cannot replicate these capabilities, and whether Tesla will earn good margins in a post-Detroit world. In short, when betting on disruption, one has to identify how this disruption will occur — not just intone the magic word. I identify four bets that Tesla is plausibly making: the EV bet, the autonomous vehicle bet, a software-platform-in-a-car bet, or the clean-energy-and-battery-company bet. None of these bets appear particularly promising.

…

The autonomous-vehicle bet

One aspect of the software strategy is so important that it deserves its own separate category. Perhaps Tesla will win the autonomous vehicle race. Alphabet (a.k.a. Google) is famously in this space, and Intel just bought the Israeli startup MobileEye for $15 billion. Uber raided Carnegie Mellon to begin to develop this capability, and every major manufacturer is investing in automation technologies. This is a very competitive space. But it’s undeniable that Tesla is at the forefront of self-driving technology that’s already on the roads. Tesla is able to learn as the technology is used — and this may be Tesla’s secret sauce: the difficult-to-get information that is necessary to perfect autonomous vehicles.

Driving is one of the most dangerous activities most people do on a regular basis. The technological problem of building software and sensors that replicate what a good driver does is difficult — and based on understanding rare events. (One Tesla driver, Joshua Brown, thought the technology was more advanced than it was and died when his auto-piloted Model S failed to recognize a semi-trailer and his car slid under it.)

Of all of the theories involving Tesla and disruption, this is the most intriguing — and convincing: Tesla is the first to roll out an autonomous driving technology. Its use allows Tesla to learn and improve, leading to a technological leadership position. Since the technology relies on machine learning, and machine learning only gets better with more data, Tesla is then able to develop a leadership position that becomes difficult to assail — analogous to Google’s in search. Tesla is then able to monetize this dominant market position.

The trouble, once again, is that at least 33 other companies are also developing autonomous vehicle technology, and also gathering a great deal of data. Any successful strategy would require a quick rollout that would prevent competitors from catching up. Mercedes’ new models already have advanced driver assistance capabilities similar to Tesla’s. Cadillac is expected to deploy within months. But perhaps the software platform is integral to this. Perhaps the software bet blends with the autonomous-vehicle bet! Tesla recently showed off this capability when it curtailed some of the autopilot features of Teslas with a software update.

The presupposition is that Tesla has and maintains an insurmountable lead. With the Cadillac generation of self driving technology, it is not clear that Tesla has any lead at all. Just to be clear, this does not mean that Tesla is out of the race or that it won't go on to a long and profitable future, but it makes it increasingly unlikely that these profits will reach the sky high level needed to justify what people have been paying for the stock.

Good science reporting can be popular if it comes with enough obscenity and cute photo-shopped memes

A while back (the queue is long), Joseph and I were discussing the post I was about to run on the treatment of autism in that godawful New York Magazine piece. I argued that the risk of throwing out irresponsible and unlikely theories about the disease was that it was likely to encourage false diagnoses. Joseph counted that the real cost was in the wasted resources that would be expended on theories that had already been effectively ruled out.


Later that evening I got around to watching this Last Week Tonight segment on Vaccines and heard John Oliver making the same case as Joseph.

If you indefinitely allow economic and political power to grow more concentrated and unchecked, it will be abused (even by those who promise not to be evil)

My surprise at the following story is somewhat blunted by my low opinion of the New America Foundation.  It always struck me as the sort of place that grinds out tired variants of failed conventional wisdom, then congratulates itself for boldness and originality, the sort of place that public intellectuals like to lend their names to and that large corporations are happy to sponsor.

That corporate-friendly approach leads to inevitable tensions, particularly in an age where big money increasingly expects a great deal of obedience from the not-so-powerful and when you have a researcher at the foundation actually focusing on the dangers of monopolies, those tensions can reach the breaking point.

From Josh Marshall:

Because this is a big interest of mine, yesterday I interviewed Barry Lynn for my podcast. Lynn is probably the most prominent and influential voice about the importance of monopolies today. He has or at least had his work cut out for him because a number of factors over recent decades had made the idea monopolies and the importance of anti-trust action seem to many like a quaint artifact of a bygone era when reformers lacked a full understanding of how monopolies work in practice. Lynn’s work and that of his working group at The New America Foundation, have led in recent years to renewed attention to the issue from professional economists, the people who have the technical knowledge and (for better or worse) policy world credibility to bring these concerns from concept to proof. ‘Proof’ is probably too strong a word but I mean the kinds of studies that make the theories real or credible in policy and political terms.

In any case, you may have noticed that there’s a big story out today in The New York Times about how Google – one of the three preeminent platform monopolies – apparently used its juice as a major funder of The New America Foundation to get Lynn’s Open Markets initiative booted. As it happens, from my understanding, while this could have been the end of Lynn’s Open Markets Initiative, it’s actually been able to get separate funding and will be even bigger on the outside. But it does show, in a particularly brazen and comical manner, the power of the platform monopolies both in economic terms and political terms.

“Bubbles and mere cheats"

Another hump-day except from Charles Mackay's  Extraordinary Popular Delusions and the Madness of Crowds.

Contrary to all expectation, South Sea stock fell when the bill received the Royal assent. On the 7th of April the shares were quoted at three hundred and ten, and on the following day, at two hundred and ninety. Already the directors had tasted the profits of their scheme, and it was not likely that they should quietly allow the stock to find its natural level, without an effort to raise it. Immediately their busy emissaries were set to work. Every person interested in the success of the project endeavoured to draw a knot of listeners around him, to whom he expatiated on the treasures of the South American seas. Exchange Alley was crowded with attentive groups. One rumour alone, asserted with the utmost confidence, had an immediate effect upon the stock. It was said, that Earl Stanhope had received overtures in France from the Spanish Government to exchange Gibraltar and Port Mahon for some places on the coast of Peru, for the security and enlargement of the trade in the South Seas. Instead of one annual ship trading to those ports, and allowing the King of Spain twenty-five per cent. out of the profits, the Company might build and charter as many ships as they pleased, and pay no per centage whatever to any foreign potentate.

 Visions of ingots danced before their eyes, and stock rose rapidly. On the 12th of April, five days after the bill had become law, the directors opened their books for a subscription of a million, at the rate of 300 pounds for every 100 pounds capital. Such was the concourse of persons, of all ranks, that this first subscription was found to amount to above two millions of original stock. It was to be paid at five payments, of 60 pounds each for every 100 pounds. In a few days the stock advanced to three hundred and forty, and the subscriptions were sold for double the price of the first payment. To raise the stock still higher, it was declared, in a general court of directors, on the 21st of April, that the midsummer dividend should be ten per cent., and that all subscriptions should be entitled to the same. These resolutions answering the end designed, the directors, to improve the infatuation of the monied men, opened their books for a second subscription of a million, at four hundred per cent. Such was the frantic eagerness of people of every class to speculate in these funds, that in the course of a few hours no less than a million and a half was subscribed at that rate

In the mean time, innumerable joint-stock companies started up everywhere. They soon received the name of Bubbles, the most appropriate that imagination could devise. The populace are often most happy in the nicknames they employ. None could be more apt than that of Bubbles. Some of them lasted for a week, or a fortnight, and were no more heard of, while others could not even live out that short span of existence. Every evening produced new schemes, and every morning new projects. The highest of the aristocracy were as eager in this hot pursuit of gain as the most plodding jobber in Cornhill. The Prince of Wales became governor of one company, and is said to have cleared 40,000 pounds by his speculations. [Coxe's Walpole, Correspondence between Mr. Secretary Craggs and Earl Stanhope.] The Duke of Bridgewater started a scheme for the improvement of London and Westminster, and the Duke of Chandos another. There were nearly a hundred different projects, each more extravagant and deceptive than the other. To use the words of the "Political State," they were "set on foot and promoted by crafty knaves, then pursued by multitudes of covetous fools, and at last appeared to be, in effect, what their vulgar appellation denoted them to be—bubbles and mere cheats." It was computed that near one million and a half sterling was won and lost by these unwarrantable practices, to the impoverishment of many a fool, and the enriching of many a rogue.

Conspiracy theorists don't just imagine improbable connections; they create them.

Many years ago I purchased a paperback copy of  Proofs of a Conspiracy by physicist John Robison (who also invented the siren [I'm sure there's a metaphor there somewhere]) at a library sale. For those not familiar:

Towards the end of his life, he became an enthusiastic conspiracy theorist, publishing Proofs of a Conspiracy ... in 1797, alleging clandestine intrigue by the Illuminati and Freemasons (the work's full title was Proofs of a Conspiracy against all the Religions and Governments of Europe, carried on in the secret meetings of Freemasons, Illuminati and Reading Societies). The secret agent monk, Alexander Horn provided much of the material for Robison's allegations. French priest Abbé Barruel independently developed similar views that the Illuminati had infiltrated Continental Freemasonry, leading to the excesses of the French Revolution. In 1798, the Reverend G. W. Snyder sent Robison's book to George Washington for his thoughts on the subject in which he replied to him in a letter:

        It was not my intention to doubt that, the Doctrines of the Illuminati, and principles of Jacobinism had not spread in the United States. On the contrary, no one is more truly satisfied of this fact than I am. The idea that I meant to convey, was, that I did not believe that the Lodges of Free Masons in this Country had, as Societies, endeavoured to propagate the diabolical tenets of the first, or pernicious principles of the latter (if they are susceptible of separation). That Individuals of them may have done it, or that the founder, or instrument employed to found, the Democratic Societies in the United States, may have had these objects; and actually had a separation of the People from their Government in view, is too evident to be questioned.

Modern conspiracy theorists, such as Nesta Webster and William Guy Carr, believe the methods of the Illuminati as described in Proofs of a Conspiracy were copied by radical groups throughout the 19th and 20th centuries in their subversion of benign organizations. Spiritual Counterfeits Project editor Tal Brooke has compared the views of Proofs of a Conspiracy with those found in Carroll Quigley's Tragedy and Hope (Macmillan, 1966). Brooke suggests that the New World Order, which Robison believed Adam Weishaupt (founder of the Illuminati) had in part accomplished through the infiltration of Freemasonry, will now be completed by those holding sway over the international banking system (e.g., by means of the Rothschilds' banks, the U.S. Federal Reserve, the International Monetary Fund, and the World Bank).

I never did more than skim the contents of the actual book. What caught my interest was the introduction which somehow managed to connect the late 18th century text on Freemasons and the French Revolution to mid 20th century conspiracy theories involving communists, intellectuals and Jewish bankers. That last point has become relevant once again, given some of the people close to the current administration.

I've always had a morbid fascination with fringe dwellers and I've noticed that they have an extraordinary gift for seeking out and drawing up on other similarly crazy peers. Remarkably, this sense of companionship and urge to collaborate frequently crosses over seemingly unbridgeable ideological differences. Right wingers too extreme for the John Birch society would find common ground with Maoists talking about evil industrialists. Proof of conspiracy was proof of conspiracy regardless of who was supposedly conspiring against whom.

Positive Thinking and Party Loyalty

It is difficult to find situations where, once you have started a task, there is a negative correlation between positive attitude and likelihood of success. (I know some people out there are starting to form a quibble , But bear with me for a little while.) You can make a similar argument with political success and party loyalty – – the group that sticks together does better in most cases.

This raises an interesting question: if these behaviors are so overwhelmingly advantageous, why do we not see a correspondingly high preference for them? Why are attitudes so negative so often? Why are groups so hard to hold together even when they serve the interests of all of the participants?

At least part of the answer, I think, lies in the hidden fallacy of the first paragraph. The statements are technically true, but they are framed in such a way as to leave out a major problem. Both scenarios started in media res with narrowly defined success. We began with situations and agendas set, but optimism will affect the situation you find yourself in and party loyalty will affect the agendas you commit to. By treating success and failure as a binary, we ignored the variability in the costs and kinds of failure. If two climbers decide to ascend a mountain, the positive thinker is more likely to reach the top, but the negative thinker is more likely to stop before risking a fatal fall.

GOP's Dream Scenario

I tend to have an overwhelming dislike and distrust for any piece of news analysis built around a tweet, particularly an anonymously sourced tweet, but I might just make a limited exception to this one, at least partly because it's an excuse for some Friday videos but also because it dovetails nicely with an ongoing thread.

Here's the tweet:

prediction just in from top R strategist: Trump resigns "once Mueller closes in on him and the family," Pence makes Rubio VP, "GOP recovers"

— John Harwood (@JohnJHarwood) August 19, 2017

One thing to get out of the way before we get to deeply in. This looks very much like a trial balloon directly or indirectly coming from an interested party, or as Dave Weigel of the Washington Post put it:

Was the source named "Darco Lubio" and was he wearing a fake mustache? https://t.co/hDfwzVlLVE

— Dave Weigel (@daveweigel) August 20, 2017

Of course, the presence of sources with ulterior motives does not rule out good reporting. You'd probably be hard pressed to find a major investigative story that didn't rely on such sources. In this case, the ulterior motives are perhaps the most interesting part of the story, but more on that in a moment.

If you have to get a story from an anonymous "top R strategist," someone like Harwood is a good place to turn. He's been working this beat since he became White House correspondent for the Wall Street Journal in the 1991. He's not above floating a trial balloon, but he is not likely to accept one from someone not in the know.

Does this mean that highly placed people in the GOP know that something big is about to go down with the Mueller investigation? That's possible, but I suspect it's more likely that this is a combination of planting some seeds and wishful thinking.



For well over a year now we have been discussing the central dilemma that the Republican Party faces with Trump. The man is dangerous, erratic, vindictive, and has no personal ties to the party. The leaders (both official and unofficial) mostly have wanted to have him disappear from the moment he went from useful rabble-rouser to actual candidate. The trouble is that there are very few ways to get rid of Trump without alienating a large enough segment of the base to devastate the party.

Impeachment or falling back on the 25th amendment would trigger an intraparty war if Trump decided to go down fighting (and that's how the smart money should bet). A resignation that left the GOP with reasonably clean hands is perhaps the only plausible resolution that leaves the party essentially intact.

That last phrase in the tweet is enormously telling. "GOP recovers" suggests that the party not recovering is not necessarily a given. Furthermore, there is at least an implication that resignation is a necessary condition for recovery.

How likely is the scenario laid out in the tweet? I wouldn't begin to speculate. Between the known unknowns and the unknown unknowns, committing to an estimate would be a fool's game, but what we can say with a little more confidence is that, based on this and other evidence, some of the top people in the Republican Party are pushing this scenario at least in part because they really want to believe it.

I suppose I should've known it would involve Tesla

I've been meaning to revisit the ddulite thread for a while. I coined the term (derived from Luddite) to refer to those people whose love of technology (or, more precisely, what they perceive as technology) makes them prefer newer and more "sophisticated" tech even when it has inferior functionality.

Recently the always solid Jason Torchinsky of Julopnik supplied us with perhaps the perfect example.

Possibly the most controversial design decision of the Tesla Model 3, even beyond its Renault Caravelle-like grille-less face, is its instrument panel, which consists solely of a center-mounted landscape-oriented LCD screen. This tweeted video showing how the climate-control air-direction system works is one of the first real looks we’ve had at the Model 3's UI, and I really can’t say I’m impressed.

That puts me in pretty direct opposition to noted rich guy Bill Lee, the Tesla investor who posted the video of the HVAC control interface, who called it “genius.”

…

These controls are invoked by pressing the small fan icon at the bottom of the display, which then opens a window in the lower right corner of the screen. That window is divided into two panes, the left one having the basic climate controls—fan speed, temperature, face/feet airflow, etc—and the right pane containing the interface to adjust where the air flows.

That’s the focus of this little video, so let’s focus on that as well. The interface consists of a horizontal bar, which I guess is supposed to represent the dash’s vent bar, and an oblong ‘thumb’ that can be positioned anywhere on the panel, and can also be split in two via a little button at the lower right.

…

First, that thumb is needlessly low-contrast; why do a light gray control on a slightly less light gray background like that? Is there a reason not to make it more visible, maybe use the blue color that’s also in this UI design?

The whole idea of the oblong is weird. I don’t normally think of airflow as hitting a given point in space; airflow is more of a directional vector—it flows out from a source, in some direction. Picking a ‘point’ like that for where the air goes is not very natural feeling.

Then, there’s the question of how is this to operate while you drive? The nature of a touch screen, drag-to-position interface is that it is entirely visual. There’s no tactile feedback, and you need your eyes to focus on the control to drag it about with your finger.

With conventional physical vent controls, you never needed to take your eyes off the road; that interface was entirely tactile. You could actually feel the flow of air, and you used your hand to direct vanes to redirect the air. Feedback was instantaneous and immediately understandable.

…

The more I think about it, the more I come to the conclusion that the Model 3's HVAC solution isn’t “genius” at all; it’s stupid. Perhaps there’s some manufacturing cost savings with the one long mono-vent; making the controls in software could be cheaper, but it also necessitates some sort of electric actuator to direct the airflow. Which is another thing, buried deeply and expensively inside that dashboard, that can break.

I want to be clear that there are things I like about Tesla’s approach here, and I’m not some traditionalist stuck in the past. I very much appreciate that they’re not falling into the usual trap of faking analog gauges, and I think an LCD screen can be designed to be a very effective instrument panel.

Physical vent controls and vanes aren’t ‘clumsy’ as Bill Lee suggests. They’re really quite elegant. They take no extra power, they give direct and immediate feedback, they don’t require taking eyes or attention off driving, they allow for greater flexibility of airflow directions, and they’re non-modal, and don’t lock out any other controls of the car.

The Tesla Model 3's solution is less effective in every possible way. That’s a weird idea of “genius,” if you ask me.

Narrative bias at NPR

One of the points we keep coming back to on this blog is that, while liberal ideological bias has long been held up as a bogeyman by critics of the mainstream media, it is both trivial and rare, at least in the way it is generally presented. You certainly have ideological and particularly partisan bias around the fringes, especially in conservative outlets such as Fox News, and you can find individual issues where the MSM displays strong biases. Entitlement reform, education reform, and gun control are all prominent examples, though it should be noted that only the last is particularly liberal.

That's not to say that biases don't exist and are not a problem – – given recent events, I list them as threats to the republic – – but the forms those biases take have little to do with left/right and everything to do with laziness, cultivating sources, driving traffic, intellectual conformity, and one that gets so little attention that there's not even a widely accepted name for it, narrative bias, selecting subjects and tweaking details to create a "good story" according to certain unstated but fairly standard criteria.

This piece by Carrie Johnson is a depressingly good example.

Robert Mueller May Not Be The Savior The Anti-Trump Internet Is Hoping For

In Procrustean fashion, it forces the facts to justify two decrepit clichés. The first is the Internet angle. For reasons too complex to delve into here, reporters and editors continue after about a quarter century to believe that framing something as an online phenomenon somehow gives it modern sheen.

In this context, you could pretty much substitute "Internet" with "carbon-based life forms." Since most journalists are active on twitter, quoting a few tweets is not evidence of an "online community." What's worse, of the four tweets she cites, one is from a cable news personality, one is from the formerly print-based publication the onion, and the third is from a writer for the still in print magazine the New Yorker.

The second and arguably even more threadbare cliché is the "not so fast" reversal which starts out by depicting a piece of supposed conventional wisdom then claiming to undercut it. In order to fit the narrative to this genre, Johnson has to cut lots of corners. For starters, while Trump opponents are certainly encouraged by the investigation and annoyed by the unavoidably slow pace of the process, it is not clear how many are "counting on" him to be their "savior." Trump resigning as part of a plea bargain would certainly be seen as a happy outcome by most administration critics (and a substantial number of Republicans who see this as the exit strategy least likely to devastate the GOP) but it is not the only happy outcome and perhaps not even the most hoped-for. Trump's critics (particularly his non-Republican critics) are arguably more focused on the Democrats retaking the house and starting impeachment hearings, preferably with the Senate also changing hands. There is also a lot of talk about the 25th amendment. Johnson has to underplay these aspects in order to set up the premise of the narrative.

Then there is the conclusion. This requires downplaying the potential amount of damage this investigation can do. In this case, that means relying on perhaps the most unreliable source imaginable.

Three months into the job, however, it's not clear what, if anything, investigators may uncover about the president, who has repeatedly denied any improper contacts with people in Russia and has called the special counsel probe "a witch hunt."

"They're investigating something that never happened," Trump told reporters last week. "There was no collusion between us and Russia. In fact, the opposite. Russia spent a lot of money on fighting me."

Putting aside the fact that three months does not seem like very long at all given the scope and complexity of this investigation, framing it in terms of Donald Trump's denials is simply unjustifiable. For starters, people under investigation virtually always start by claiming "there's no there there." Even if we were dealing with a normal politician, these declarations of innocence wouldn't count for much, but Trump is no normal politician. Among high-ranking elected officials, he has a unique-in-living-memory record of dishonesty and fabrication both directly and through his surrogates. On top of that, the statement actually ends with a demonstrable lie about Russia trying to undermine his election. If anything, a denial this ridiculous should arouse disbelief in readers and, more to the point, in reporters.

Keeping with the narrative, Johnson further understates the danger to the administration.

Another complicating factor: Mueller is using grand juries in Alexandria, Va., and Washington, D.C., and grand jury information is rarely made public.

"It is going to be hard and frustrating to get this information out," said Peter Zeidenberg, a lawyer at the Arent Fox firm who worked on the special counsel team investigating the leak of a CIA operative's identity in the George W. Bush administration.
…

In his leak investigation, a lot of information eventually became public through the prosecution of former vice presidential aide Lewis "Scooter" Libby. Absent a decision to charge someone with a crime, investigations in Congress may be the best way for people to understand what happened and why in last year's election interference.

A couple of important points here, one of which is badly understated, the other omitted entirely. First, big investigations like this do tend to produce criminal charges, often of people not immediately involved with the primary case (just ask Jim Guy Tucker). When you start digging into any sufficiently complex scenario involving great money or power, you will generally find that someone broke some law. Second, and this very much affects the previous point, the legitimate scope of this investigation is huge. Of the quid pro quo being investigated, only the middle piece is reasonably well contained.

After Trump lost access to conventional funding due to his habit of screwing over business partners, he had to rely on disreputable sources. Much, perhaps most of the time, those sources had direct or indirect ties to Russia. This means that a thorough investigation will need to closely examine the financing of every project Trump was involved in for perhaps the past 10 years. It is highly likely that the grand juries will find something to charge someone with. And we haven't even gotten into the hacking of the election itself.

None of this means that Trump or a member of his inner circle will be indicted. It doesn't even necessarily mean that anyone will be indicted (though that second one seems a bit improbable). What it does mean is that, like the "anti-Trump Internet" premise, the facts have been stretched or truncated to fit the genre.

The Republicans' 3 x 3 existential threat

I've argued previously that Donald Trump presents and existential threat to the Republican Party. I know this can sound overheated and perhaps even a bit crazy. There are few American institutions as long-standing and deeply entrenched as are the Democratic and Republican parties. Proposing that one of them might not be around 10 years from now beggars the imagination and if this story started and stopped with Donald Trump, it would be silly to suggest we were on the verge of  a political cataclysm.

But, just as Trump's rise did not occur in a vacuum, neither will his fall. We discussed earlier how Donald Trump has the power to drive a wedge between the Republican Party and a significant segment of its base [I wrote this before the departure of Steve Bannon. That may diminish Trump's ability to create this rift but I don't think it reduces the chances of the rift happening. – – M.P.]. This is the sort of thing that can profoundly damage a political party, possibly locking it into a minority status for a long time, but normally the wound would not be fatal. These, however, are not normal times.

The Republican Party of 2017 faces a unique combination of interrelated challenges, each of which is at a historic level and the combination of which would present an unprecedented threat to this or any US political party. The following list is not intended to be exhaustive, but it hits the main points.

The GOP currently has to deal with extraordinary political scandals, a stunningly unpopular agenda and daunting demographic trends. To keep things symmetric and easy to remember, let's break each one of these down to three components (keeping in mind that the list may change).


With the scandals:

1. Money – – Even with the most generous reading imaginable, there is no question that Trump has a decades long record of screwing people over, skirting the law, and dealing with disreputable and sometimes criminal elements. At least some of these dealings have been with the Russian mafia, oligarchs, and figures tied in with the Kremlin which leads us to…

2. The hacking of the election – – This one is also beyond dispute. It happened and it may have put Donald Trump into the White House. At this point, we have plenty of quid and plenty of quo; if Mueller can nail down pro, we will have a complete set.

3. And the cover-up – – As Josh Marshall and many others have pointed out, the phrase "it's not the crime; it's the cover-up" is almost never true. That said, coverups can provide tipping points and handholds for investigators, not to mention expanding the list of culprits.


With the agenda:

1. Health care – – By some standards the most unpopular major policy proposal in living memory that a party in power has invested so deeply in. Furthermore, the pushback against the initiative has essentially driven congressional Republicans into hiding from their own constituents for the past half year. As mentioned before, this has the potential to greatly undermine the relationship between GOP senators and representatives and the voters.

2. Tax cuts for the wealthy – – As said many times, Donald Trump has a gift for making the subtle plain, the plain obvious, and the obvious undeniable. In the past, Republicans were able to get a great deal of upward redistribution of the wealth past the voters through obfuscation and clever branding, but we have reached the point where simply calling something "tax reform" is no longer enough to sell tax proposals so regressive that even the majority of Republicans oppose them.

3. Immigration (subject to change) – – the race for third place in this list is fairly competitive (education seems to be coming up on the outside), but the administration's immigration policies (which are the direct result of decades of xenophobic propaganda from conservative media) have already done tremendous damage, caused great backlash, and are whitening the gap between the GOP and the Hispanic community, which leads us to…



Demographics:

As Lindsey Graham has observed, they simply are not making enough new old white men to keep the GOP's strategy going much longer, but the Trump era rebranding of the Republican Party only exacerbates the problems with women, young people, and pretty much anyone who isn't white.

Maybe I am missing a historical precedent here, but I can't think of another time that either the Democrats or the Republicans were this vulnerable on all three of these fronts. This does not mean that the party is doomed or even that, with the right breaks, it can't maintain a hold on some part of the government. What it does mean is that the institution is especially fragile at the moment. A mortal blow may not come, but we can no longer call it unthinkable.

That's not to say that sleeping around can't be a plus

Over the past few years I have gotten in the habit of making a quick (or, to be honest, often not-so-quick) visit to Wikipedia when I read something that seems curious and I've spotted some common threads. For example, when a US representative makes a particularly clueless reactionary remark, I will give you excellent odds that he or she comes from a white flight district. I have found this to be the best predictor of far right extremism for politicians at the municipal or district level. Growing up in such a neighborhood is also strongly correlated with journalists and pundits holding these views.

Another curious phenomenon that I think I may have largely explained via Wikipedia is the mysterious rise of young, highly successful incompetents. You know what I'm talking about. You see someone with no apparent ability or qualifications who has raced up the career ladder, or has just been handed a huge check to start a company with a dubious business plan or has landed a high profile gig at a big-name publication. These are incredibly competitive fields and yet some manage to race past countless peers who are smarter, more talented, and better qualified.

The standard joke response is "who did that person sleep with?" but a little digging online provides a better explanation, or at least a highly suspicious pattern. If you look up the bio of a bizarrely successful incompetent, you will notice that the overwhelming majority come from an elite university and, in a truly remarkable number of cases, a ridiculously selective and expensive prep school. Wealth and family connections often figure prominently as well, but they are not as essential. Spending a decade or so in the company of the rich and powerful seems to be sufficient.

Just to be clear, I'm not making a blanket statement about the intellect or abilities of people who come from these schools. There are a lot of smart, capable preppies with degrees from Harvard out there. What I am saying is that the connections and prestige that comes with this kind of education provides enormous advantages, advantages so large that they often swamp the qualifications we like to think determine success.

With that in mind, the following raises disturbing implications:

"Access to colleges varies greatly by parent income," writes Raj Chetty of Stanford University and four co-authors. "Children whose parents are in the top 1% of the income distribution are 77 times more likely to attend an Ivy League college than those whose parents are in the bottom income quintile."