Linette Lopez: "Cryptocurrencies are for speculators, criminals, and cosplayers"

Lopez is one of the sharpest journalists currently working the business beat. Marketplace loves her. Elon Musk hates her. She combines first rate reporting with a rare gift for calling out bullshit. 

 And in 2021, there is no richer vein of bullshit than...

Cryptocurrencies are for speculators, criminals, and cosplayers. Aside from that, they're useless, and I'm tired of everyone trying to pretend otherwise.

I have waited for years for someone to explain to me a decent use case for cryptocurrencies. But throughout the recent fervor over crypto with its huge price boom and subsequent bust, I've yet to hear one.

I understand it as a fun speculative asset if you have money to burn and a tolerance for stomach-churning volatility. But you need to understand that it is neither an inflation hedge (as it has demonstrated over the past few weeks), nor a "store of value," nor a viable alternative to government-backed currencies.

The entire asset class (strong words for it, I think) is extremely opaque, and there are embarrassingly few rules governing how it circulates. So if your "digital money" is stolen, or you get scammed, I don't want to hear about it. The very things that make it fun for gamblers — like volatility — are some of the very things that make it dangerous for anyone who thinks it is a good investment.

It's easier to understand the craze if you accept that there really is no point. Just let that wash over you.

Mid-week tweets

Arguing on Twitter.. 😅 pic.twitter.com/NKh9Gt517r

— The Feel Good Page 🌻 (@FeeIGoodPosts) May 26, 2021

This undercuts our solution phobia thread, but credit where credit is due. Kristof has long been one of the few bright spots in the NYT opinion section,

Here's the best investment in the world right now, and the West is not taking it: Spend $50 billion to vaccinate people in developing countries worldwide, and, the IMF says, this will generate $9 trillion in economic returns. I hope Biden reads my column https://t.co/iGYeVEmvF8

— Nicholas Kristof (@NickKristof) May 26, 2021

The Ohio lottery is another example of solution-focused thinking. Moynihan is right. Turley is... Turley.

The beauty of lotteries is that they are a cheap way to motivate people. It would be more costly to pay people to take the vaccine. And you would have to build an expensive implementation infrastructure to set up payments.
(As a prof in Maryland I endorse Ohio's lottery) pic.twitter.com/oVIA1WW57d

— Don Moynihan (@donmoyn) May 28, 2021

Silver is making an important point here. It's difficult to claim we're living in unprecedented times then to base your next argument on precedent.

I still think there's a little bit of tension between the notion —which I largely agree with—that the current GOP represents an unprecedented (at least in modern American history) threat to democracy and the CW that Democrats will surely suffer the usual midterm penalty in '22.

— Nate Silver (@NateSilver538) May 28, 2021

Anyone else remember the wave of "this is not the Dick Cheney I know" quotes from about 2 decades ago? https://t.co/R7LUSI4V0b

— Mark Palko (@MarkPalko1) May 31, 2021

You can find the full here (but it really doesn't help).

"When you start to confuse government research and development with actual research and development..."

Mike Lee is a fool.

— Charles P. Pierce (@CharlesPPierce) May 28, 2021

Good advice

Take note of journalists who pretend to believe conservatives when they pretend to be outraged about things we know they aren’t outraged about.

— Brian Beutler (@brianbeutler) May 30, 2021

And while we're on the subject.

Correction: Meghan is at a casino in Maryland honoring American’s fallen by yelling “whooooo” between Jello shots and blackjack.

May we look to her example during this most solemn of weekends that no one should enjoy in any way. Don’t even think about it.

— Mike Redmond (@theredmond) May 31, 2021

From 2019.

If we start with the compound hypothesis that conservative movement propaganda and disinformation has driven a significant portion of the population (let's call it 20 to 40% just to have a ballpark) into a highly unpleasant state of stress and cognitive dissonance and that these people gravitate toward and reward anyone who relieves this emotional tension, either through message, affect, or language.

And sometimes they just drive into people.

WTF? Driving your car through a vaccination tent isn't a "protest". It's attempted murder and probably best described as terrorism. https://t.co/3C5F1leVrX

— Josh Marshall (@joshtpm) May 27, 2021

The flawed notion of equating caving to pressure with "protecting our credibility" is a big part of what got us here. https://t.co/HK7O4cyNkN

— Mark Palko (@MarkPalko1) May 30, 2021

Take a minute. It's worth it.

Bird's eye view of juggling. pic.twitter.com/gOgH2dAHMw

— Strictly (@StrictlyChristo) May 29, 2021

And to bring us full circle.

Twitter versus real life... pic.twitter.com/kmAZF91YJz

— Rex Chapman🏇🏼 (@RexChapman) May 20, 2021

The Lab Leak Hypothesis -- tell me why I should care (6/1/21)

Six months from now, sure. Maybe sooner if we can regain our momentum on shots-in-arms here and up vaccine production worldwide. When we reach containment (which is tantalizingly close in the US), there are a number of important conversations we need to have about what just happened, and what steps we need to take to minimize the damage of the next one. The origins of Covid-19 will play an important part in those discussions

But I can't think of a single likely finding that will seriously affect any decision currently facing us. 

The thread on solution-phobia started somewhat tongue-in-cheek but it's gotten deadly serious. In the 21st century, we have a problem with problems. We've seen the same pattern with global warming, threats to democracy, and the pandemic. Fox et al. deny the crisis while the respectable press equates seriousness with painting the most hopeless picture possible. The one thing everyone seems to agree on is that nothing can be done. 

In an emergency, the rational first step is to stay focused on the emergency and I think one has come along.

Thoughts on the complexity of trade

 This is Joseph.

Matt Yglesias talks about the free speech implications of the U.S.-Chinese economic integration:

That being said, it seems really clear at this point that the original premise of U.S.-Chinese economic integration got one important point backward. Rather than trade and development allowing for some spread of American liberal norms into China, it is doing the reverse, and western multinationals’ commercial interests in China are inducing them to impose Chinese speech norms on the West. And we ought to try to do something about it

I think that this is an inevitable part of trade and integration -- if you create this type of tight connection then you end up dealing with the good and bad of your trading partner. 

But the part that I also think we need to consider is how the gains from this trade arrangement have been distributed in the United States. It is definitely true that both sides are better off after a trade deal. But the distribution of gains may vary. Not only did we create legitimacy for a totalitarian regime, but we shifted resources to groups like silicon valley (the same groups Matt Yglesias is worried are vulnerable to trade pressure) by allowing for inexpensive manufacturing. If we had taxed and invested these gains in the rust belt, then we'd probably have fewer billionaires and more social cohesion.

The short version of this thoughtlet is that trade is complicated and very simple mental models of how complicated transactions will work out are probably not an ideal approach. Not that this could be applied to other complicated relationships framed in simple terms, like Brexit. 

Muskmas in May

In case you've forgotten the reason for the season, we coined the term as a catchier version of the Musk Day proposed by by Neil Strauss in his openly messianic 2017 profile of Elon Musk in Rolling Stone.

Musk will likely be remembered as one of the most seminal figures of this millennium. Kids on all the terraformed planets of the universe will look forward to Musk Day, when they get the day off to commemorate the birth of the Earthling who single-handedly ushered in the era of space colonization.

The tone of this recent Mark Whittington piece in the Hill (a publication more mainstream and sober, in various senses of the word, than Rolling Stone) is more subdued but the sentiment is the same.

Still, Musk has embodied a combination of vision, wealth, skill and no little luck that has served him well. If (when) Americans return to the moon on a SpaceX lunar Starship, he will become more than a celebrity. Musk will be a world historic figure who school children will study for centuries to come.

In some ways, the Hill piece is actually worse than the Rolling Stone cover story. Since 2017 we've seen Musk manipulate markets, commit various ethics violations and possibly fraud, fuel covid denial, break promises, lie constantly, sic a misogynistic army of fan boys on female critics, accuse someone who hurt his feelings of being a pedophile, bust unions, endanger employees, convince Tesla owners that his level 2 cars were actually level 5 and could safely drive themselves, and so much more.

But it takes a lot to dislodge the myth of a tech messiah. The New York Times is still running fawning interviews while public intellectuals like Josh Barro and Matt Yglesias are genuinely perplexed at why so many people dislike Musk. The myth is losing ground, but it's a slow process.

On a more cheerful note, here's a festive clip of some classic Will Vinton animation.

"He knows Elon knows"

For those wanting to cut through the hype and bullshit around autonomous vehicles on land or in the air, there are few sources better than real engineer (and former fighter pilot) Missy Cummings. This Marketplace interview is highly recommended.

[Apologies for the formatting. Since Blogger upgraded its platform, it now takes twenty minutes of HTML editing just to undo the improvements and I just don't have the time.]

The California Department of Motor Vehicles said this week it’s reviewing whether Tesla is telling people that its cars are self-driving when, legally speaking, they’re not. This follows fatal crashes that may have involved its Autopilot feature. Tesla advertises a “Full Self-Driving” upgrade option. One man has been busted in Teslas more than once for reckless driving. He hangs out in the backseat and steers with his feet.

Meanwhile, no cars are fully self-driving yet. I spoke with Missy Cummings, the director of the Humans and Autonomy Laboratory at Duke University. She says the so-called deep learning that cars need to see the road around them doesn’t actually learn. The following is an edited transcript of our conversation.

...

Cummings: I think there are three camps of people not just in self-driving, but in robotics and artificial intelligence in general. There’s the camp of people like me who know the reality. We recognize it for what it is, we’ve recognized it for some time, and we know that unless we change fundamentally the way that we’re approaching this problem, it is not solvable with our current approach. There’s another larger group of people who recognize that there are some problems but feel like with enough money and enough time, we can solve it. And then there’s a third group of people that no matter what you tell them, they believe that we can solve this problem. And you can’t talk them off that platform.

The people who are the biggest problem are the people in that second group, the ones that believe that with enough time and money, we can fix it, instead of recognizing the elephant in the room for what it is, which is not fixable under our current approach. And this is why you see companies like Starsky, a trucking company that went out of business, and you starting to see all the mergers across the automotive industry where all companies are either teaming up with each other or with software companies, because they realize that they just cannot keep hemorrhaging money the way they are. But that pit still has no bottom. And I don’t see this becoming a viable commercial set of operations in terms of self-driving cars for anyone anywhere, ever, until we address this problem. 

...

Cummings: Well, I think the Tesla situation is a little different. Should they be allowed to call their driving assist technology Full Self-Driving? So that’s one problem. And then, if you want to ask, is Tesla ever going to have a robotaxi program? I’ll tell you, that answer is no. But that problem is less acute for Tesla, because they have what is otherwise a great product. I love Tesla cars. I just think Autopilot and especially Full Self-Driving are both overhyped, and they underdeliver in terms of performance, and they’re dangerous.

Wood: So there’s a math problem and there is a pretty significant marketing problem?

Cummings: That’s right. So I think that we’re starting to see increasing numbers of crashes in this country and abroad, where drivers think that their car is far more capable. I think what is interesting to me was how the Tesla driver who got arrested for being in his backseat while he was driving vocalized that he’d already been warned once, and he defied the warning and did it again, and then said he would keep doing it because he knows Elon [Musk] knows what he’s doing. And he fully believes in Tesla.

And so what I find most interesting about that statement is that one man is vocalizing what so many people believe. They believe that this technology really can be fully self-driving, despite all the warnings and despite all the statements and the owner’s manual, and you having to agree that you’re going to pay attention. Despite all of those warnings, there’s some belief likely based in calling a technology Full Self-Driving and calling it Autopilot where people believe in the religion of Tesla full self-driving, and that is dangerous.

Content accumulates. Intellectual property rules.

I wasn't planning on doing another post on the value of television content libraries this soon -- lots of other stuff going on -- but the news forced my hand. 

From The Wall Street Journal. [emphasis added. And if you haven't done so already, check out Monday's post before reading further.]

Amazon.com Inc.’s desire to acquire the fabled MGM movie and television studio in a deal valued at $9 billion with debt is the latest sign that the e-commerce giant is renewing its emphasis on entertainment and seizing an opportunity to jump up in weight class.

...

In MGM, Amazon would gain control of a vast movie and television library including the “James Bond” and “Rocky” franchises. Other MGM properties include “The Pink Panther” and “Robocop.” Amazon is likely to try to create new content from the material, analysts and industry executives said.

Still, Amazon will have to invest yet again to develop and generate successful new franchises out of the intellectual property it may acquire.

Not all MGM content would immediately surface on Amazon’s Prime Video platform. MGM has licensing deals throughout the industry that lock up much of their content for several years. Such agreements would at least, though, serve as revenue generators for Amazon.

A lot of the analysis in this article (particularly around the Netflix comparison) is bad, sometimes crossing the line into factually questionable, but it does suggest that journalists and analysts are finally starting to think seriously about content libraries. (Perhaps they actually did learn something from Quibi.)

We'll come back to this (and how so many people are still getting the Netflix business model so wrong).

While we're on the topic of old TV shows...

Check out this 2020 multi-panel cartoon from the New Yorker. The first few panels will give you a taste but you'll need to click to see the pay-off (which is very much worth the trip).

A billion dollars would go a long way in Mayberry

A note on pandemic TV viewing from USA Today.

Last year, NBC's "Friends" – which ended its 10-year run in 2004 – was the most-watched comedy on broadcast or cable TV, with 96.7 billion minutes viewed, a 30% jump from 2019. "Andy Griffith" grew 29%, to 58.3 billion viewing minutes, while ABC's "Roseanne" saw a 70% viewing surge to 20.1 billion minutes.

For a bit of context, check out this 2015 article also from USA Today.

Well, through the magic of syndication revenue, Friends pulls in a whopping $1 billion each year for Warner Bros. Here's the kicker though: That translates into about a $20 million annual paycheck each for Jennifer Aniston, Courteney Cox, Lisa Kudrow, Matt LeBlanc, Matthew Perry and David Schwimmer, who each make 2% of that syndication income.

Without going into the rabbit hole of valuation and Hollywood accounting, we can't start to approximate the money the Andy Griffith Show has brought in, but the Friends comparison gives us some idea of the kind of numbers we're talking about. It's true that the business of television has changed over the past few years but the overall impact of streaming has been to pump tons of money into the industry so I doubt the overall amounts have dropped much.

Even if we ignore the pandemic spike (which is probably a mistake. Once a new audience gets invested in an old show, they tend to stay invested) and assume considerably lower revenue for Griffith compared to Friends per viewing hour, it seems safe to say that the show has brought in billions in 2021 dollars between syndication, streaming and merchandising over the past sixty-one years and will probably go on to bring in billions more.

Keep in mind that for more than fifty of those sixty-one years, we're talking virtually pure profit, a steady, safe, maintenance-free nine-figure check coming in every year. 

There's a good chance that Griffith may go on to surpass Lucy in terms of longevity, but while the show may turn out to be the extreme, it is not an outlier. In addition to Lucy there are a number of other old shows that have continued to attract and hold new audiences. MASH, Columbo, Golden Girls,  Friends, Seinfeld, the Simpsons, and anything from Dick Wolf all come to mind and we haven't even cracked the lid on the franchises and reimaginings (Star Trek, the Addams Family, Battlestar, Perry Mason). 

Content accumulates. Intellectual property rules. With apologies to the long-time readers who have been through this before, these two principles should be top of mind in any reporting on the business of television and streaming, but it is difficult to find mention of them in any coverage outside of the trades. As a result, the value of most of what you read on this, particularly from the East Coast press, ranges from limited to non-existent. 

The nice thing about writing a post on tax increases is that you can dust it off in ten years later and be confident that most people still won't understand marginal tax rates.

And with another Democrat again trying to roll back Republican tax cuts, we are likely to see another wave of just-scraping-by stories.

FRIDAY, MAY 20, 2011

"This really isn't about the hunting, is it, Bob?"* -- more on just scraping by on a quarter mil

Comments to my recent post on getting by on $250,000 (which was itself basically a comment on this excellent piece by Felix Salmon) picked up on the fact that, for people making a little over 250K in taxable income, the actual increase in taxes paid under the Obama plan would be remarkably small. This raises an obvious question: why do we keep hearing about the hardship on people making less than 300K when hardly any of the increase falls on this bracket?

The answer I suspect has less to do with math and more to do with marketing.

Sympathy for financial hardship is almost always inversely related to wealth and income. It's hard to feel all that sorry for someone who makes more money than you and yet has trouble keeping the bills paid.

For most of us, a quarter million in income takes you to the far outer edge of the sympathy zone. It seems like a lot of money but you might be able to convince some people (particularly, say, well-paid Manhattanites) that it was possible for a non-extravagant family to have a combined income of 250K and still not have much of a buffer at the end of the year.

Unfortunately for people lobbying to keep the Bush tax cuts, that 250K family wouldn't actually pay any additional taxes if the cuts expired. Neither would a 260K family or a 270K family (assuming those numbers are gross). Because we're talking about taxable income and marginal rates, a family's gross would have to be closer to 400K than to 250K in order to see anything more than a trivial increase.

If you're trying to make an emotional pitch for the Bush tax cuts this creates a problem: the only people significantly affected by the increase are those well outside of the sympathy zone. You can't expand the zone (the suggestion that many families making a quarter of a million were just getting by was met with considerable derision. Upping the number by another hundred thousand is a no starter). The other option is to focus on families making between 250K and 300K while downplaying the actual magnitude of the increase on these families.

Of course, that second option does require an overly compliant press corps that will simply parrot the releases of various think tanks without attempting to correct the false impressions they give. Fortunately for the tax cut supporters, that doesn't seem to be a problem.

* punchline to an old and very dirty joke.

At least some of them are wearing masks

There's a certain strangely consistent dream logic here. If you can get yourself into these people's heads, you can almost follow the thinking. They are paranoid, meme-fed conspiracy theorists who share a personally defining belief in fringe medicine. It is not entirely surprising that many of them have come to see their perceived enemies not just as evil but as literally infectious. 

Mack Lamoureux writing for Vice:

The conspiracy—which comes in several shapes and sizes—more or less says the vaccinated will “shed” certain proteins onto the unvaccinated who will then suffer adverse effects. The main worry is the “shedding” will cause irregular menstruation, infertility, and miscarriages. The entirely baseless idea is a key cog in a larger conspiracy that COVID-19 was a ploy to depopulate the world, and the vaccine is what will cull the masses. 

Experts say the conspiracy is born from a fundamental misunderstanding of how vaccines work. It has been widely debunked and you can read about it here, here, and here, among other places.  

Anti-vax influencers are instructing their fellow anti-vaxxers as well as anti-maskers (at this point the two communities overlap to a huge degree) that one of the best ways to defend themselves from this blight is to co-opt…social distancing, the very strategy they have long decried. 

Sherri Tenpenny, an anti-vaxxer who was found to be key in spreading COVID-19 conspiracy theories, suggested on a recent anti-vax livestream that you may have to “stay away from somebody who's had these shots…forever.” 

Another prominent anti-vaxxer suggested quarantining people who have been vaccinated. “There is something being passed from people who are shot up with this poison to others who have not gotten the shot,” said Larry Palevsky, a New York pediatrician and anti-vaxxer,  on a separate livestream. They should also “have a badge on their arms that say ‘I've been vaccinated even though it's not a vaccine’ so that we know to avoid them on the street, to not go near them anywhere in society,” he said.

It’s not just social distancing that anti-maskers/anti-vaxxers are begrudgingly accepting. Some conspiracy theorists are wondering if perhaps their longtime bane, the mask, could become their salvation. One perplexed poster on the fringe site 4chan asked their fellow anons if they should “wear a mask around the vaccinated, because they shed the mRNA stuff?” 

...

Nevertheless, the conspiracy is picking up steam. Recently a private school in Miami went so far as to ban vaccinated teachers from interacting with unvaccinated students. In April, a Gold Shop in Kelowna, British Columbia, caused a stir when the owners put up a sign saying the vaccinated were banned from entering the store, citing worries about vaccine shedding. The store also had a sign that masking was not allowed and instructed customers to “lower their face diaper.” 

I vaguely remember that bars had a simple and reasonably effective way of checking who was legally allowed to drink. Perhaps we could do something similar.

As mentioned before (until regular readers are sick of hearing it), we have a problem with convergent thinking and solution-phobia. Add to that the journalistic imperative to frame every policy choice as an adversarial contest with no clear winners and you end up with a discussion that not only ignores a number of viable approaches but which often settles on two of the least viable,  a pair of bad choices which go on to dominate op-ed pages and cable news shows. Whether by design or not (and, yes, I do believe antagonism toward solutions is a real thing), the result is a discussion that consists of each talking head listing reasons why the other position won't work.

In addition to the ways defeatism has biased our coverage of vaccine promotion and made precedented compliance levels seem unattainable, it has also largely limited the discussion of compliance checks to two extreme options: a complex and expensive vaccine passport system which raises privacy issues; and an honor system which does not do a goddamn thing. 

We need to open up this discussion starting with ideas like this. 

https://t.co/sB856zssYP

— Mark Palko (@MarkPalko1) May 16, 2021

P.S. Forgery. We need to come back and explain this from a market segment/incentive standpoint (if only there was a blog that covered epidemiology and marketing, that would be perfect), but [spoiler alert] it's probably not that big a concern in this context.

Better than Trump is no longer good enough -- we need to address the CDC train wreck

This is going to be our big thread for the next few days. 

I am trying to think of a case where a federal agency's mishandling of messaging and behavior economics has been this incompetent and this costly, and nothing comes to mind. Back in 2020, it was possible to assume that all of the blame (rather than just some of it) should go to the previous administration but it's mid-May and the fuck-ups just keep coming.

Principles of public communication:

1) Tell them what you’re going to say
2) Say it
3) Tell them what you said

Not applied in this instance, to put it mildly.

— James Fallows (@JamesFallows) May 17, 2021

This is not a question of over- or underreacting (though the CDC has remarkably managed to do both). It's not a matter of taking the wrong positions (they've generally gotten the science right). The problem is that when it comes to crafting messages or setting up incentives or predicting public reactions, they are, to put it bluntly, spectacularly bad at their job.

The tragedy here is that the Biden administration's extraordinarily competent handling of the other aspects of the pandemic have brought us achingly close to our goal. We just have to do a few more things right.



P.S. Nor is this generally a good sign

"In an interview with STAT, Schuchat said she’d been thinking of retirement for a while, but felt she could not leave the agency during a time of crisis."

By @HelenBranswell.https://t.co/InRgzgTV8A

— Matthew Herper (@matthewherper) May 17, 2021

"It's OK to say I'm vaccinated because..." [Why people might not honor the honor system.]

The public discourse is broken part 8,394.

We've had a lot of discussion about whether or not the fully vaccinated can meet without masks and social distancing even though the research is fairly clear on this point. We also talked a great deal about the challenges of requiring verification to enter certain establishments or events even though these problems are likely to be relatively minor (more on that later). 

Instead of the simple and generally effective approach of checking vaccination cards, we're looking at an honor system and we haven't spent nearly enough time going over the reasons that this might be a worse option, such as the way that removing verification and enforceable penalties opens the door for rationalizations.

A very incomplete list:

"I feel fine."

"I already had a mild case. I can't catch it again."

"I'll socially distance."

"I've been careful not to expose myself."

"I'm just stepping in for a little while."

"Everyone else in there is vaccinated."

"It's just this one time."

"The pandemic is almost over."

"If I haven't caught it by now..."

"Everyone else is doing it."

The tragic waste of a sunny day

 It should have been a turning point; it ended up a joke.

William Bryan, acting head of the US Department of Homeland Security's Science and Technology Directorate, outlined the findings at the news conference.

While noting the research should be treated with caution, Mr Trump suggested further research in that area.

"So, supposing we hit the body with a tremendous - whether it's ultraviolet or just very powerful light," the president said, turning to Dr Deborah Birx, the White House coronavirus response co-ordinator, "and I think you said that hasn't been checked but you're going to test it.

"And then I said, supposing you brought the light inside of the body, which you can do either through the skin or in some other way. And I think you said you're going to test that too. Sounds interesting," the president continued.

"And then I see the disinfectant where it knocks it out in a minute. One minute. And is there a way we can do something like that, by injection inside or almost a cleaning?

"So it'd be interesting to check that."

Pointing to his head, Mr Trump went on: "I'm not a doctor. But I'm, like, a person that has a good you-know-what."

But the blame for what happened next (or failed to happen) did not rest with Trump alone. The ultraviolet light study and the growing evidence of aerosol transmission had perhaps the most important policy implications of any development in the pandemic up to that point. We could, at the same time, reduce transmission of the disease and greatly improve the economy just by moving as much activity as possible outdoors in daylight. 

Some restaurants started offering curbside delivery and a few put in walk-up windows but these were rare exceptions.  Instead, it was another lost opportunity. We could have made things better but we didn't. Yet another sign that we live in a society fundamentally disinterested in solutions.