Netflix Exit Strategies -- Comcast?

I apologize for writing these out of order, but one of the lessons I've learned as a blogger is that, if you want to speculate on something, get the post up quick because events have a way of moving faster than you could imagine and a position can go from bold and provocative to yesterday's news overnight.

For that reason, I want to jump ahead in the Netflix thread to exit strategies. Right now the company is sitting in a classic corporate throne of Damocles, king of the world but with a sword dangling over its head. Having a market cap bigger than Disney's is wonderful, but that stock price is based almost entirely on a highly questionable narrative. How do you gracefully cash out in such a situation?

One possibility I'd like to open up for discussion is some kind of merger or acquisition with Comcast (with the question of who would be acquiring whom rather bizarrely up in the air). There is something of a precedent here with AOL Time Warner, but Netflix and Comcast are a far better fit.

The two companies already have an extremely close working relationship. As previously mentioned, in the all important children's division, Netflix is largely dependent on licensing properties from the NBC/Universal library. NBC also produces (and apparently owns) one of Netflix's highest profile shows, Kimmy Schmidt.

Netflix also desperately needs guaranteed access to a major content library. We currently have a thread going about how the "plan" for Netflix to produce its way out of this problem is unworkable and probably insincere. Though not on par with Disney or Warners, NBC/Universal does have such a library.

The Disney Fox deal means that the House of Mouse now owns a controlling interest in Hulu. This has got to leave Comcast feeling somewhat out in the old. Pairing up with Netflix would put the company roughly on an even footing with its rival.

And finally, with the uncertain future of net neutrality, the business logic of the partnership is even stronger.

I'm writing and posting this in haste so I well may end up repenting it in leisure, but if we are on to something, I'd very much like to be to say you heard it (and discussed it) here first.

More on transit from Alon Levy

This is Joseph

This tweet thread by Alon Levy is worth reading in full.  In particular:

Tech has been extremely successfully in solving a specific class of problems.

That said, the real issue is that US transit has some serious limitations and challenges.  Alon goes on to talk about how both New York and DC have let their transit system degrade.  Trying to limit transit expansions and improvements may work on the margin, but the ultimate issue is that roads (or air-lanes or whatever) need to be regulated as public goods. That makes every transit discussion inherently political.

I also want to highlight Matt Yglesias' response:

I think that this take is right on.  Paradigm changing is all well and good but it does make sense to build on the firmest foundation of best practice for transit.

Checking in on MoviePass

MoviePass Hikes Subscription Fees, Limits Access to Films

The company is strapped for cash and has introduced a series of measures that it hopes will keep itself solvent. They include jacking up the prices from $9.99 to $14.95 per month over the next 30 days, as well as limiting access to nearly all Hollywood blockbusters within their first two weeks of release. The company’s parent company, Helios and Matheson, said these steps will reduce its cash burn rate by 60%.

But the company still faces major questions about its sustainability. On Friday, MoviePass borrowed $6.2 million, including $5 million in cash, in order to stay afloat and meet its financial obligations. Beginning on Wednesday, its creditor can ask MoviePass to pay up to $3.1 million of the money it borrowed.

Monday, May 14, 2018

Yes, we're losing money on every transaction, but we have a plan to increase volume

[Apologies for letting this one sit in the queue for so long. I plan to do a fairly long post on the various absurdities of this business plan, but I realized that the company may not be able to wait for detailed analysis. Therefore, I'm just going to hit a couple of high points in this and an upcoming post.]

I suspect that most people (maybe especially those who read this blog) have become thoroughly jaded to bad business plans running on new economy hype and Silicon Valley money. Many of you probably feel that you seen it all before, that you have lost the capacity to be shocked by how stupid an idea can be or by how many millions it can raise.

I more than sympathize. In a world where Tesla is valued higher than General Motors and Bitcoin is... well, Bitcoin, it is difficult to come up with the topper. That said, sometimes a piece of business logic, while perhaps not the stupidest or the most overvalued, nonetheless manages to stand out through a blinding lack of self-awareness.

Many companies have used the losing-money-but-making-it-up-in-volume argument over the past few years, but I don't know that I've ever seen it stated in quite such naked terms.

From an interview with Mitch Lowe, CEO of Moviepass.

[David Pogue] The math doesn’t really work out, does it? Let’s say you go to the movies twice a month. In New York, that’s $360 of movie tickets a year — but you’re paying MoviePass only $120 a year. MoviePass is losing $240 a year, just on you. Multiply that by MoviePass’s 2 million subscribers, who are currently buying 6% of the nation’s movie tickets. How is that sustainable?

...

Pogue: You must go through your life explaining how MoviePass works. And everybody says exactly the same thing back to you…

Lowe: Which is, “how can you possibly afford such an amazing deal?”

Pogue: Yeah. How do you make money?

Lowe: There’s two groups of people that go to the movies. There’s 11% that go 18 times a year, and they buy half of all the movie tickets in the country. 5.5 billion tickets.

There’s another 200 million people (89% of moviegoers) that only see the blockbuster hits. They go to four maybe five films a year. They see “Star Wars” and the Marvel films. Our product is priced to reactivate those casual moviegoers, to get them to go see the great independent films that now they say, “I’m just going to wait and stream at a later date.”

...

Lowe: People have told us they’re starting movie clubs, and now they’re going with a bunch of friends, going to the movies every week together and then going out afterwards. We have a guy who said, “I’m going to turn 40. I’m going to go to a movie for 40 days in a row leading up to my 40th birthday.” But what’s even cooler is people are seeing films they never would have seen without a MoviePass card.

Pogue: But I’m confused about that, because every time someone goes to a movie, you’re losing more money. Don’t you secretly prefer people who don’t use the card as often?

Lowe: They [the people who see a lot of movies] become more valuable to us. They evangelize the service. They become more valuable to our partners, the studios, exhibitors.

Understanding Netflix – – children's programming isn't child's play

Whenever an extraordinarily high.value for a company appears to be based primarily on a good narrative, you should always examine the bullish story for red flags, both in terms of questionable claims and notable omissions. In the case of Netflix, there is no omission more notable than the lack of discussion of children's programming.

There was perhaps no more important market in the adoption of every major advance in television history, from the initial postwar boom to cable television to home video. If someone is discussing the next step in the evolution of the medium and isn't spending a reasonable amount of time on children's programming, you should, at best, take what's being said with a grain of salt and at worst, dismiss it entirely.

This is particularly true with Netflix. If you have been following the standard narrative at all, you've heard ad nausea about the extraordinary amounts of money that the company is paying for original content. You've heard how all this money is building up a tremendous content library that will allow Netflix to compete with, even dominate the big media companies.

But these numbers, regardless of how immense and awe-inspiring they may be, are largely meaningless without proper context. If we want to evaluate the claim that Netflix is pursuing (and has a reasonable shot at achieving) media dominance, we need to dig into the details of intellectual property and how the strategies are playing out in different market segments. There is no more useful place to start than with children's programming.

The conventional narrative that Netflix is using its massive content spending to eventually achieve monopoly status implicitly assumes that the company is building a content library of such size and quality that it will no longer be dependent on any of the major studios for programming. As previously mentioned, even before the Disney acquisition of Fox, this was almost impossible, so unlikely that one has to question whether or not the company itself was sincere about these claims.

Netflix has always been relentlessly focused on two objectives: subscriber growth and hype. When it comes to intellectual property, however, the record is far more mixed. Proponents have a number of explanations for this, but most of them seem to come down to either

1. It took a while for the present strategy to evolve and be put into place.

2. There will always be a few outliers.

In these discussions, the subject of children's programming is generally avoided. Perhaps because it does not at all the standard narrative nor is it covered by either of the standard excuses.

To belabor the obvious, the greatest value of a Batman or a Scooby Doo lies less in what you've done in the past and more in what you have the option of doing in the future. Rights to characters and derivative works is the gift that keeps on giving. Even if you license another company to make use of your character, the result (in addition to getting a nice fat check) is usually to enhance the value of your intellectual property.

If Netflix were truly serious about its goal of world domination, it would need to be building a catalog not just of shows, but of valuable characters and franchises. The quickest way to do this is to simply buy some well-established property. Unfortunately, almost all of the really well-known options are held by the handful of major studios and they have no intention of letting them go. Nonetheless, there are some smaller players who would be worth acquiring if you genuinely wanted to build a catalog. As far as I can tell, Netflix is not pursuing these.

The slower and far more difficult path is to start from scratch, introduce a large number of characters and potential franchises that you own outright then promote the hell out of them. There does appear to be a little bit of activity in this area but not nearly enough to qualify as a serious effort.

Instead, Netflix continues to base its children's programming largely on licensed properties. Unless something surprising is going on beneath the surface (and I do have some questions about the company's future relationship with NBC/Universal), it would appear that much, possibly most, of their content spend in this area not only does nothing to build up their intellectual property; it actually serves to enhance the IP of the very companies it is supposed to annihilate.

Here's a list of current or pending Netfilx original kids shows that don't appear to meaningfully contribute to the content library:

Kong: King of the Apes, Voltron: Legendary Defender, Home: Adventures with Tip & Oh, Skylanders Academy, Legend Quest, Spirit Riding Free, Lego Elves: Secrets of Elvendale, The Magic School Bus Rides Again, Stretch Armstrong and the Flex Fighters, Trolls: The Beat Goes On!, The Boss Baby: Back in Business, Spy Kids: Mission Critical, Harvey Street Kids, The Epic Tales of Captain Underpants, and She-Ra and the Princesses of Power.


Obviously, we don't know the details of these agreements it's possible Netflix is getting some kind of rights to derivative works or is cutting a better deal than we might expect (though it should be noted that historically the company was known for over, not underpaying). With that said, it certainly appears that they are not at all focused on building the kind of content library they would need if serious about their stated goals.

At least not in the areas that count the most.

Light rail versus self-driving cars

This is Joseph

Consider:

“We are definitely going to have pushback,” said Brad Templeton, a longtime Silicon Valley software architect who preaches the potential of “robocars.” (He believes the subway paved over in concrete for autonomous vehicles could transport more passengers than rail can.) “I regularly run into people who even when they see the efficiency numbers just believe there is something pure and good about riding together, that it must be the right answer.”

and

“Don’t build a light rail system now. Please, please, please, please don’t,” said Frank Chen, a partner with the venture capital firm Andreessen Horowitz. “We don’t understand the economics of self-driving cars because we haven’t experienced them yet. Let’s see how it plays out.”

Now I typically love Brad Templeton's analysis.  Look at this great article, for example. But I do think there are some issues with this approach.  I certainly don't think my like for public transit is about being with other people -- that is actually one of the major downsides of a light rail system is dealing with other passengers who are sick or unaware of personal hygiene standards.  There are other issues.

One is the geometry one:

Highways today can carry about 2,000 cars per lane per hour. Autonomous vehicles might quadruple that. The best rail systems can carry more than 50,000 passengers per lane per hour. They move the most people, using the least space. No technology can overcome that geometry, said Jarrett Walker, a Portland-based transportation consultant. 

Which is brought up in the same article.

Another issue is the average age of cars on the road, which right now is 11.5 years. This means, in the absence of subsidies or very aggressive regulation, it is going to be something like 30 years before we could have all self-driving cars.  Many of the efficiency gains come from the self driving cars being the dominant type of car on the road.

Also, cars that make 2 trips (to pick up and then return) are going to use more road space that a car that is driven and then parked.  Now it might be the case that you can get it down to a reasonably small percentage of total miles -- technology is cool.  But that also weighs into the geometry argument.

So I hope that self-driving vehicles are coming.  But I don't see that they necessarily solve issues of congestion -- you make driving more pleasant and people will be willing to do more of it.  They might radically improve safety (which would be awesome) and they might make commuting time much, much more pleasant.  These are goods, in and of themselves, which don't need a pure robocar future to harvest.

But it seems like a tough gamble to stop current transportation planning until the new technology is mature enough that my type of objections can be answered.

This is how you cultivate IP.

Since we're in the middle of a thread about the business of television, content libraries, and intellectual property, I thought it would be a good time to look at examples of doing it right, particularly since these examples give me an excuse to post more Friday videos.

Cartoon Network Groovies were a great illustration of how to take characters from the catalog (some like Atom Ant and Quickdraw McGraw, all but forgotten) keep them in the public eye, package them in an appealing way, and even make them surprisingly hip.

Imagine a channel that showed a bunch of music videos during commercial breaks. These videos featured footage from the shows the network aired, and sometimes even had original animation made for it. And here's the kicker: many songs were done by prominent artists like They Might Be Giants, Will.i.am, and even Devo. Prepare to be surprised, as this was Cartoon Network during the late 1990s/early 2000s.

Tech industry approaches in other fields

This is Joseph


I found this twitter thread by Dr. Sarah Taber to be pretty thought provoking.  The real interesting part is at the top:

What this makes me wonder is whether the approach of tech translates well to other industries.  The windows PC was a major productivity improvement and the occasional blue screen of death was annoying rather than fatal.  On average, it made productivity a lot higher and the clients were willing to put up with these problems in exchange for the increased productivity.  Just think of how much better a word processor is than a typewriter at conducting a writing project.  In terms of revising work, it has simply been a game changer.

This starts to be less ok when the costs of failure are high enough.

Or consider this example, also from Sarah Taber:

The fast improvement approach of Tech has some really awesome features, but it isn't really geared to dealing with these long term issues.

Now, I want to be clear.  Computer and software technology has been miraculous.  It makes sense to wonder what other areas this technology can be applied to.  And all processes have error rates and problems -- tech just have a different set of failure points to traditional industries.

That said, there are problems that require a different approach.  It may be faster to hammer a nail than to use a screw, but the screw solves different problems and has different performance characteristics than the nail.  So we should be open to switching to nails, but keep a clear head about how these approaches may show faults when applied to areas other than the ones in which they were developed.

Disney, Fox and Netflix

I apologize for this, but the only really good summary I've found of the impact of the Disney Fox merger (particularly on Netflix) is this interview with the Hollywood Reporter's Kim Masters. Not only do I not have a text version, but I can't even get it to link directly to the relevant story. Instead, the best I can do is suggest you fast-forward the segment to about 16 minutes in, immediately after the execrable  Jeremy Peters).

One of the strangest aspects of the Netflix coverage has been the disconnect the way the story you get from the NY media vs what you hear in LA. In many ways, this echoes what we saw with over the air television and the rise of the terrestrial stations a.k.a. diginets. Major NYC news organizations like the New York Times and Wall Street Journal completely (and I do mean completely) ignored the story even after most major media players (including NBC/Universal, CBS, Fox, Sony, producer Mark Burnett, and somewhat indirectly Disney) jumped on the bandwagon.

With Netflix, no one could accuse the East Coast journalistic establishment of not covering the story, but they have repeatedly ignored, distorted, or dismissed the take coming from people who actually know the industry. The standard argument is that industry experts don't understand the new economy or the Silicon Valley Way of doing things. I vaguely seem to recall a story about a medical testing company that made similar arguments. Perhaps I should go online and try to find out what happened to them.

One idea which is treated as credible by investors and the financial press while seen as completely absurd by anyone with knowledge of the business is the idea that the company can, in a relatively short period of time, create a content library that rivals that of the major studios in quantity and quality. It's true that Netflix is spending a great deal of money producing new shows, but even if they were doing this in the smartest possible way and getting the greatest possible bang for their buck (which they aren't) it would still be a tiny fraction of the investment they would need to make.

As industry watchers have previously noted, Disney was already big and powerful enough to devastate, possibly even destroy, Netflix by going with another streaming service or starting their own. With the Fox acquisition, the company's content library is much larger and it now owns a majority share in the Netflix competitor, Hulu.

None of this is an especially recent development. I need to go back and check the exact timeline, but for at least a few weeks and possibly a few months, the big question is not been "will someone by Fox pictures?" But rather would it be Disney or NBC/Universal/Comcast? In those weeks or months, any analysis you've seen that defends Netflix's skyhigh valuation and doesn't address this issue should be ignored as worthless.

Jonathan and Huell

When I first moved to LA about 15 years ago, I did what countless others had done and started working my way through the cheap half of Jonathan Gold's recommendations. Though it's starting to lose its standing, LA still perhaps cheap eats capital of the United States. You can still go to a different spot every day of the year and find something unique and wonderful with change fact from your ten, possibly your five.

Gold had a special affinity for these places, taco trucks and hamburger stands and mom-and-pop restaurants tucked into corners of strip malls in the least glamorous parts of town. Though no one could write more skillfully about fine cuisine, Gold 's heart was always clearly with the little guys and small, unheralded places that truly caught the spirit of a culture and/or a neighborhood in a way that the Michelin starred restaurant almost never could.

Gold was a local boy and he knew and loved each and every one of those neighborhoods. Like Pauline Kael, he wrote beautifully about his subject while using it to explore bigger questions. Gold brought a great sense of joy to his writing because he enjoyed not just the food but the individuals and the culture that produced it.

When you follow one of his recommendations, you more than just experienced a great meal, you felt had truly gotten to know a new neighborhood.

This got me thinking about another departed California journalist, one who most definitely was not a hometown boy but who adopted and was adopted by the state like no other. Huell Howser

Howser was another California institution, a transplanted local color reporter whose down-home demeanor was matched by extraordinary skills. He was one of those broadcasters whom you could drop pretty much anywhere with a microphone and a request for 25 minutes of tape and you'd get something ranging from good to wonderful.

Howser had an openly stated disdain for the slick and touristy spots that inexplicably attract so many travel writers (particularly from the New York Times). He preferred to find his stories in out-of-the-way neighborhoods and small desert or mountain towns, much as Jonathan Gold often lavished his highest praise on places like Bakersfield.Howser liked to say that his objective was to get people to look around them and find their own adventures.

One of the things that is most maddening for a resident of Los Angeles is the way that writers from other parts of the country (again particularly New York) go to great lengths to avoid anything interesting or distinctive when they visit, then go back home and write about how Los Angeles is boring and without distinction. Gold and Howser were a welcome corrective.

Both men also shared something else in common' they both saw it as their job to seek out the praiseworthy. This was perhaps the most notable trait of Howser's persona ("That's AMAZING!") but it was just as important to understanding Gold. In a field often marked by viciousness, he actually lived by the rule of if you can't say anything nice, don't say anything at all. LA had a wealth of great food. Why waste everyone's time complaining about the bad.

By all accounts, both men were remarkably like their personas. You can find this in the many remembrances of Gold that just came out. For Howser, I recommend this from Gustavo Arellano.

Libraries versus Amazon

This is Joseph, talking about something Mark Palko tweeted.

There is an article suggesting we replace libraries with Amazon:

Amazon have created their own online library that has made it easy for the masses to access both physical and digital copies of books. Amazon Books is a chain of bookstores that does what Amazon originally intended to do; replace the local bookstore. It improves on the bookstore model by adding online searches and coffee shops. Amazon Go basically combines a library with a Starbucks.

The justification seems to be at least partially about taxes:

Now, I have a few observations.

The bookstore/coffee shop model (perhaps we could call it Barnes and Noble) is a nice retail model that has had some modest success.  But it seems to be in decline more than growth these days and presumes that the marginal person in it is actually a paying customer.

I will note that Long Island must have unusually expensive library taxes, as reports across the US in response to this usually report taxes that are an order of magnitude lower.  That said, locating things in New York City and environs is often very expensive.  I am not sure we should set national policy on the NYC real estate market.

It is clear that bookstores would like libraries to go away.  For the same reasons that Uber is probably not a fan of public transit systems -- if you reduce competition that is going to increase profits on the margin.  Is it really the case that subsidizing Amazon is an urgent public priority?  I mean I like Amazon and use their services, but they don't seem to be struggling as a company.

Finally, taxes are complicated issue but there is no example I can come up with of a large society that functioned without them.  There are some exceptions on the margin.  Medieval Iceland, for example, is interesting but obviously used a lot of family mechanisms to cover the gap.  Or the Incas, who may not have levied taxes per se, but had what looks a lot like a centrally planned economy to compensate.  Now it is clear that taxes can be too high.  But it is also clear that no central government often works out poorly.

What I find interesting is how people always want to try these experiments in the United States, a large, diverse, multi-ethnic country with a large military organization.  You can make a low tax version of this work, but I am wondering if we should try and make this model work for a smaller country first.  Maybe Iceland could try regressing back to the middle ages for a couple of decades and we'll see how it all turns out?

When Bell Labs got funky

Leafing through Internet Archive's If magazine collection looking for public domain art I could appropriate (sooner or later I will need a shot of robot-on-robot violence)...

... I came across an ad that seemed interesting.

 [If was the sister publication of Galaxy]

 A bit of Googling took me to this from WFMU

"Music From Mathematics" was an album of early electronic music, programmed by the boffins (very likely in authentic period white coats and glasses) at Bell Laboratories way back in the early 1960s, using the then-new IBM 7090 computer and an "electronic to sound transducer". The music on the album, about half of which is included here, is a mixture of strange, other-worldly blips, rushing white noise, tootly reworkings of classical pieces and a marvellous period "singing computer" version of "A Bicycle Made For Two" (already featured on the 365 Days Project, #62, and so not included again). Full marks to Decca Records for releasing the record - remember that in 1962, these alien sounds would have been totally new, and suitably space-age in their sound.

So for your listening pleasure...

You thought I was exaggerating with the Muskmas line, didn't you?

This amusing thread from Gizmodo's Matt Novak beautifully illustrates some points we've been making for a long time. The language and imagery we use to describe technology in the 21st century has increasingly become that of myth and magic, even for advances that are mundane or trivial. At the same time (and I'm sure the causal relationships run both ways here), our default ways of thinking about tech and innovation have become increasingly dominated by what we've called magical heuristics, mental modes and tools only appropriate for a nonrational, supernatural worldview.

The worst part is that Donald Trump’s batshit press conference is distracting me from the amazing emails piling up in my inbox defending Elon Musk’s honor pic.twitter.com/I7Dna2EzVd

— Matt Novak (@paleofuture) July 16, 2018

The best line to hit my inbox from the Musk defenders so far: “......without his help we on this planet are doomed.”

— Matt Novak (@paleofuture) July 16, 2018

The second best line so far: “The guy Musk has done more for humanity in the last 10 years than anyone has in the last 2000.”

— Matt Novak (@paleofuture) July 16, 2018

Obviously, it would be a mistake to treat the crazy emails that show up in a journalist's inbox as a representative sample, but before we dismiss these comments as the ravings of random lunatics, go back and take a look at this previously discussed Rolling Stone cover story. Are the messianic unicorn comments from Elon Musk's supporters really that much more over-the-top than this?

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.
...
“Musk is a titan, a visionary, a human-size lever pushing forward massive historical inevitabilities – the kind of person who comes around only a few times in a century”

.

Of course, the Rolling Stone piece is itself a bit of an extreme case, but not an entirely unrepresentative one. We've collected dozens of examples over the past few years of Silicon Valley saviors and wondrous sorcery in tech drag. These stories ranged from partially to primarily bullshit, but they have had a great impact on the way we invest, make public policy decisions, and pursue research. In other words, we are paying a real price for believing in these fantasies.

Deficits

This is Joseph.

This is an interesting tweet thread by Jeffery Brown.  Here is an image of a few tweets:

What is really interesting here is not that Dr. Brown is wrong.  He isn't.  He is completely correct. 

What is interesting is where the focus is.  In the thread he names two MMTers, Bernie Sanders (an independent failed presidential nominee) and Alexandria Ocasio-Cortez (a Democratic nominee for the house who is not even elected yet). 

Now I am huge believer in fiscal responsibility.  Here is Fortune on the recent tax cuts:

Trump’s heady economic potion, however, is masking misguided policies that could leave those same businesses with a severe hangover from today’s celebration. The U.S. government’s huge and growing budget deficits have become gargantuan enough to threaten the great American growth machine. And Trump’s policies to date—a combination of deep tax cuts and sharp spending increases—are shortening the fuse on that fiscal time bomb, by dramatically widening the already unsustainable gap between revenues and outlays. On our current course, we’re headed for a morass of punitive taxes, puny growth, and stagnant incomes for workers—a future that’s the precise opposite of what Trump champions.

I think Jodi Beggs identified why this is important here:

I would like to think carefully about the deficit.  I think that balance of payments is important and I remember that hyper-inflation is something that can really happen.  But if the focus is on minor players on the party out of power and not on the people actually increasing the deficit now, it is now wonder that people wonder about motives.  If the deficit becomes a political argument than the bad fiscal consequences I would like to avoid become a lot more likely. 

More on health care costs

This is Joseph.

As projections go, this one is shocking:

Medical services are expensive. There is no getting around it. The average family health insurance premium in the US is approaching $20,000. By one estimate, average family premiums could rise to 100 percent of US median household income by 2033 if trends continue.

Even now, the median family income in the United States is fifty-nine thousand dollars, which means health costs are starting to dominate expenses.  In parallel with the cost of housing (which is growing faster then wages right now), it is pretty clear that either wages need to go up soon or we need to find a method to control costs. 

One feature of health care costs that is odd is the presence of different costs for different customers (off the street versus negotiated insurance costs versus medicare/medicaid rates) and a complete lack of pricing transparency.  It is difficult to save up for medical procedures when you don't know the actual price and it is common for bills to be a surprise. 

Obviously, consistent and transparent prices are going to be needed in order to utilize market forces, as is competition.  I think that it isn't a surprise that centrally planned health care systems have proved quite a popular solution to this problem. 

Which doesn't mean that is the way to go.  But if we are going to find a way forward then we need to find a way to contain costs.  I see this as the central question of health policy at the moment. 

What next for health care costs?

This is Joseph

I read with great interest this article by Edward Murphy on US health care costs.  The bottom line was quite interesting:

In March, three researchers from the Harvard T. H. Chan School of Public Health published a study in JAMA analyzing the well-known reality that the United States spends dramatically more on health care than other wealthy countries. They compared the US, where health care consumes 17.8 per cent of gross domestic product, to 10 comparable nations where the mean expenditure is 11.5 percent. Despite spending much less, the other countries provide health insurance to their entire populations and have outcomes equal to or better than ours. The researchers found that this inefficiency gap is primarily driven by two characteristics of the US system: the high cost of pharmaceuticals and inordinate administrative expenses.

and

It is not in the interest of huge profit-making corporations to restrain the overall cost of the US health care system. In fact, their interest is served by driving health care expenditures higher. When combined with the spending analysis provided by researchers, the financial data disclosed by public corporations point to a path that the country must follow to make our system more coherent and less costly. Any progress will require driving down pharmaceutical pricing and reducing administrative costs imposed by middlemen. We are not doing that yet but, ultimately, we must. 

This is an evergreen topic given that health care is expensive and there is a sense that it doesn't have quite the overall outcomes that you'd expect.  If it was just that a wealthier country spends more on health to get better outcomes, then I would say that the market was functioning effectively.  It's unclear to me that being wealthy means an interest in higher administrative costs, although I guess hedge funds might be an example of this phenomenon.

This is relevant because there is a real issue with laws to regulate health care, both in terms of payments and the laws themselves.  I see this as the end of the idea of a regulatory framework for the private marker (the affordable care act) and a prelude to a pivot to some other approach. I am waiting to see who might provide leadership on this front.  What is the vision of the Trump administration on health care policy and cost containment?  How are they going to tackle this difficult and nearly intractable issue?

Curious minds are waiting for the other shoe to drop and see what the new plan is

Postscript:  And in case you think these high profits are needed for innovation, Noah Smith has a great tweet here. 

A follow-up to yesterday's post

This is Joseph

In yesterday's post we talked about employer monopsony.  Relevant to this post is today's news about Washington state successfully suing to get fast food franchises to no longer enforce "no poaching" agreements.  The gist is:

The provisions prohibit workers at, for example, one Carl’s Jr. franchise from going to another Carl’s Jr. They do not stop those workers from taking jobs at restaurants run by a different chain.

While this does not lock workers into a single chain, it does make it harder for them to move around if one particular employment situation gets bad.  Any barriers to mobility tend to depress wages and thus the question of minimum wage as a policy.

It's true that tackling the bad policy might be a better overall decision.  But minimum wage is an easy to enforce policy that is hard to weasel around.  Once again, it is a policy that bears more looking at.

Jodi Beggs on employer monopsony power and mimumum wage

This is Joseph

Jodi Beggs has a great post on the minimum wage in the presence of employer monopsonies.  If there is only one buyer of market labor, that purchaser has a decided advantage.  Her main point of doing this analysis was to make the point that:

If a labor market is a monopsony (or if employers have monopsony power), minimum wages could actually increase rather than decrease employment.

She provides a number of worked examples, which are fun to look over.

What this made me wonder about the is the role of non-compete agreements in labor markets.  For example, there is a sandwich company that used to enforce non-compete agreements. Insofar as actors include these agreements in employment contracts, we might be closer to the point where minimum wages have a reduced cost (or even a benefit) to employment levels.  This is also likely to occur in high skill areas where the number of employers is small.  If you are a skilled airplane builder and live in Montreal, you will find limited employer options that are not Bombardier.  Moving has costs and, in the modern world, it isn't necessarily trivial to immigrate.

These effects may also occur in small markets, where the number of competing employers is limited, which is more of what Jodi Beggs was worrying about in her post.  In order for market forces to work properly, there are a number of key assumptions that are required.  There being multiple buyers of labor is one of these and we shouldn't be surprised if your intuitions are reversed in some markets.

Now how that works for things like the Seattle minimum wage are more complicated.  But this could be an important layer to understanding this as different studies had slightly different industries and it may be that employer diversity is confounding some of these associations.

But it is worth reflecting on as it makes the arguments against the minimum wage a lot weaker if there are market monopsonies present.  If so, then the policy benefits of this policy are actually pretty great.

(Jodi Beggs points to an article on the topic, and the evidence seems mixed, but not ignorable).

Another in our series of revolutionary postwar innovations – – let's go to the tape

With the advent of magnetic tape, audio recording changed more in a few years than it had in the previous few decades. For record producers and sound engineers, performances went from being something holistic that could only be presented as captured to being a collection of elements, each of which could be edited, tweaked, and recombined in infinite ways. Though digital technology has greatly increased the power and convenience of the sound engineer's toolbox, the basic paradigm is about 70 years old.

Though the effects took a bit longer videotape, the impact was arguably even greater. Though film remained the standard for situations where high picture quality had to be maintained, the ability to play back a recording immediately ("and now let's go to the instant replay") and the ability to reuse tape radically altered the business of video production and television news.

Here's a notable example of the new audio paradigm from CBS Radio Workshop.

The premiere broadcast was a two-part adaptation of Aldous Huxley's Brave New World, introduced and narrated by Huxley. It took a unique approach to sound effects, as described in a Time (February 6, 1956) review that week:

It took three radio sound men, a control-room engineer and five hours of hard work to create the sound that was heard for less than 30 seconds on the air. The sound consisted of a ticking metronome, tom-tom beats, bubbling water, air hose, cow moo, boing! (two types), oscillator, dripping water (two types) and three kinds of wine glasses clicking against each other. Judiciously blended and recorded on tape, the effect was still not quite right. Then the tape was played backward with a little echo added. That did it. The sound depicted the manufacturing of babies in the radio version of Aldous Huxley's Brave New World.

A few years earlier, Gunsmoke (a serious contender for best show ever in two different media) was noted for its detailed sound montages, including different effects for the pouring of beer and whiskey.

Interesting bit of trivia about the show. CBS chose to run the show unsponsored for the first few seasons. They wanted a genuinely adult Western and the producers were afraid advertisers would pressure them to lighten the program. If you listen to this episode, you'll understand why.

Back on the urbanist beat

The following video hits a couple of points we've been making over the years about urbanization and the creative class. The first is that utopian urbanists, while not without good ideas and an abundance of fine intentions, tend to operate under a hopelessly romanticized vision of urban living and that they often embrace policies that push reality even further from their own ideal.

If you're looking for a perfect Richard Florida style neighborhood, a place where a film director, a JPL rocket scientist, and a coder might run into each other and decide to have a coffee at a sidewalk café, you'd be hard pressed to find a better spot than this section of Burbank.

You can eat on the cheap (a small coffee and a big pastry at Portos can come in under three dollars). You can watch professional makeup artists comparing prosthetics for an indie horror film and costume designers sifting through the racks of a thrift store. You can see a first-rate play or improv comedy show, go to a book signing, or pick up some groceries in one of the delis.

This is very much in line with the lifestyle many utopian urbanists fantasize about, but unfortunately it can only exist in a fragile Goldilocks zone of just the right density and property values, and ironically, the more appealing a neighborhood like this is, the more factors that make it appealing are threatened.

High density, high traffic areas are really only suitable for two types of retail businesses, expensive and/or fast-turnover. Businesses where customers take their time and don't spend a lot of money cannot survive under these conditions.

Just to be clear, I'm not taking sides or advocating certain policies here. If this stretch of Magnolia is all chain stores in a couple of years, I probably won't hang out there but I won't begrudge the property owners for seeking optimal returns either. I simply want to point out that urbanists and the YIMBY movement may not have thought through the implications of some of their proposals and rhetoric.


Via Mark Evanier.

Media Post: The Last Jedi

This is Joseph.

Since the Last Jedi came out there have been a number of critiques of it; some better than others.  It is quite clear that the attempt to deconstruct the franchise, while artistically interesting, had some issues.  In particular, I would summarize my thoughts as:

Visuals: Stunning.  Simply stunning.  What a beautiful movie
Creativity: I may not love Canto Bight, but boy was it creative
Characters: Ok.  There is a break in continuity of character between movies, but it isn't fatal
Plot: Weak, very weak.

Probably my favorite review of it is this one.  The author lists eight critiques, of which I see #3 as being the most serious:

The primary plot (of the cruiser chase) is riddled with plot holes and doesn’t make any sense. The film suffers because its backbone is broken.

Now, it isn't the case that previous movies completely avoided these issues.  Compare with the Empire Strikes Back -- the asteroid chase has similar issues and while they are more clever about dialogue, the timeline is a mess.  And some characters had big changes -- Darth Vader seems much more important than he used to be, for example, and much less deferential to senior military commanders.

But the issue was the deconstruction, I think.  The writer-director played against type, which the Empire Strikes Back did not do (at least not so completely).  Now you can shake up a franchise, but this is a delicate matter that requires great skill.  Mark Evanier tells an anecdote about a junior writer asking Ray Bradbury if it was ok to be as high maintenance as Harlan Ellison.  The rejoinder was priceless:

"I don't know if that's okay but if you try it, check first and make sure you have the talents of a Harlan Ellison."

I think that this is exactly right.  If you want to subvert expectations then it should be in the service of creating a better or more thought provoking story.  This story was very well shot but needed a serious rewrite of the script and a goal as to how the subversion would make the story sing.

It was also easy in the franchise for this move.  Thor Skywalker points out that the Marvel Cinematic Universe is twenty movies in, with a fairly limited range of characters and plots, and hasn't felt the need to subvert expectations yet:

In fact his comparison of Thor Ragnorak, which is not a perfect movie by a long stretch, to the Last Jedi is quite clever.  Both movies are ultimately about failure.  They even both have the breaking of the protagonist's weapons, the loss of home, and the death of most of the protagonist's organization.   But one has a tighter script and more narrative payoffs.  The other has better visuals and more creativity.  Guess which one grossed higher.

Now it is true, I was cheering for Rey to date Finn and not a serial killer.  But I don't mind being wrong -- that is part of the fun.  Who would have guessed it would be Han and Leia?  Or that Darth Vader would be the one to defeat the emperor?  Or that Yoda actually fought Darth Sidious?  I like being surprised, so long as the surprise keeps the story fresh and interesting.


So my view: good movie, fabulous eye candy, great for kinds, but one that really needed a script doctor for the fans in the audience.

"Back when fifty years was a long time ago" -- updated with new video links

I realized that the Willoughby episode fit into the late 19th century time travel genre (As well as being a good example of how people in the early sixties felt about the pace of their own lives).



And the link on this one had gone dead.

Sunday, December 30, 2012

Back when fifty years was a long time ago

I've noticed over the past year or two that people ranging  from Neal Stephenson  to Paul Krugman have been increasingly open about the possibility that technological progress been under-performing lately (Tyler Cowen has also been making similar points for a while). David Graeber does perhaps the bst job summing up the position (though I could do without the title).

The case that recent progress has been anemic is often backed with comparisons to the advances of the late Nineteenth and early Twentieth Centuries (for example).  There are all sorts of technological and economic metrics that show the extent of these advances but you can also get some interesting insights looking at the way pop culture portrayed these changes.

Though much has been written pop culture attitudes toward technological change, almost all focus on forward-looking attitudes (what people thought the future would be like). This is problematic since science fiction authors routinely mix the serious with the fanciful, satiric and even the deliberately absurd. You may well get a better read by looking at how people in the middle of the Twentieth Century looked at their own recent progress.

In the middle of the century, particularly in the Forties, there was a great fascination with the Gay Nineties. It was a period in living memory and yet in many ways it seemed incredibly distant, socially, politically, economically, artistically and most of all, technologically. In 1945, much, if not most day-to-day life depended on devices and media that were either relatively new in 1890 or were yet to be invented.  Even relatively old tech like newspapers were radically different, employing advances in printing and photography and filled with Twentieth Century innovations like comic strips.

The Nineties genre was built around the audiences' self-awareness of how rapidly their world had changed and was changing. The world of these films was pleasantly alien, separated from the viewers by cataclysmic changes.

The comparison to Mad Men is useful. We have seen an uptick in interest in the world of fifty years ago but it's much smaller than the mid-Twentieth Century fascination with the Nineties and, more importantly, shows like Mad Men, Pan Am and the Playboy Club focused almost entirely on social mores. None of them had the sense of traveling to an alien place that you often get from Gay Nineties stories.

There was even a subgenre built around that idea, travelling literally or figuratively to the world of the Nineties. Literal travel could be via magic or even less convincing devices,
 
Figurative travel involved going to towns that had for some reason abandoned the Twentieth Century. Here's a representative 1946 example from Golden Age artist Klaus Nordling:

There are numerous other comics examples from the Forties, including this from one of the true geniuses of the medium, Jack Cole.

Images from 1896

From Scientific American 1896-11-14

This is important because it shows how people were thinking about phonographs and recorded media in general.

This is important because it illustrates the age's fascination with the massive.

This isn't important at all.

Fourth of July Americana from the great Jerry Goldsmith.

First, two great scores from two perfect little movies.









Next, two great scores from movies you could probably skip. (Howard Hawks should have stopped with El Dorado. He also should've hired Goldsmith for that one as well. With all due respect to Nelson Riddle, the score they ended up with pretty much sucks.)











And finally, a highly appropriate original composition.

Come to think of it, I'll bet we can find a venture capitalist who'll go for the discounted twenties plan

As bubbles go, the glut of video content is in many ways fairly benign. It means lots of work or people in the industry and a ton of often very good shows for viewers (so many that the main complaint is the inability to keep up). Furthermore, with the exception of Netflix (which may have some very unhappy investors at some point in the future), most of the money seems to be coming from companies with such deep pockets that a few billion here are there can go relatively unnoticed. Apple, for instance, could set up a line of street corner kiosks that sell $20 bills at 50% off and it still wouldn't make a dent in the company's profits.

But though the content bubble is probably nothing to get upset about, it is still worthy of study as an example of the mentality. In particular, this story nicely illustrates how the bubble mania and the fear of missing out of the next big thing creates its own kind of dream logic that overrides normal rational concerns.

As previously mentioned, even before the bubble the amount of content available was probably growing faster than the market, especially when we focus on the United States (more on that later). The introduction of smart phones and to a lesser degree tablets did significantly increase the potential hours of purview or consumption, but that was a one time bump and we are probably seeing it leveling off by now.

Content accumulates. It is true that programs tend to lose audience appeal with time, but the drop off is often quite slow. Numerous movies and TV shows maintain a shockingly stable viewership over the years. I Love Lucy and Perry Mason have maintained a following for over 60 years now. Blocks of MASH run on at least a half-dozen basic cable channels and show up in local syndication in pretty much every market. Some shows even have a resurgence. Golden Girls (no, I can't explain it either) has gone from obscure, to retro, to ironic, to genuinely cool, a status it didn't even achieve in its original run.

Even if the production of new programming had remained steady, there would be real concerns about oversupply, but instead it has exploded with more and more programs featuring bigger and bigger budgets. With each year, the unsustainability of the model has become increasingly obvious and yet the idea that you have to be producing your own content to survive has become an ever more closely held item of faith.

A couple of interesting assumptions get baked into these discussions. One is that you have to have your own content. The other is that the future of online video is the subscription all-you-can-the model. Both are highly suspect. As for the first, there is reason to believe that, while almost all of the hype and marketing center on the Netflix originals, much if not most of their viewership comes from licensing existing programs like blockbuster movies or old shows like the aforementioned Golden Girls.

As for the second, this is basically just the old cable TV bundling strategy (which everyone hates) dressed in 21st century drag. With both models, you are paying for programming you have no interest in ever watching. With streaming services, this has been momentarily obscured by a willingness to just break even or even lose money, but that is not likely to go on indefinitely.

The Apple programming slate suggest something close to peak bubble mentality. They are spending obscene amounts of money on big-name talent, most of which has extremely limited international appeal. They have no idea how these shows fit into their existing business plan. They have no need to be producing original content at all. They are doing this strictly because of the extraordinary popular delusion that not being part of this bubble will mean being left behind in the new economy.

From the Verge:

That’s an impressive roster, but it’s important to remember that Apple is building its catalog from the ground up. It has to catch up to streaming companies that have had years-long head starts and are currently producing hundreds of titles. And while we have dedicated platforms from heavy hitters like Amazon Prime, Hulu, and Netflix, as well as exclusive systems such as Stargate Command and CBS All Access, Apple has yet to announce exactly where any of these announced shows will debut.

The world's first photo booth

Another example for the point we've been making about how the period centering around the 1890s was marked not just by amazing technological advances that made headlines but also by smaller, more personal inventions and discoveries that permeated every aspect of people's lives.

For instance, getting a photograph taken was still an elaborate and expensive process in the early 1870s. 20 years later, it was something you paid a nickel for at the local arcade.

From Scientific American 1893-03-18

AUTOMATIC PHOTOGRAPHY.
Of all the many uses to which the automatic selling machine has been put, that of taking photographs seems the most remarkable. And yet this is what is being done now in several public places in New York and Brooklyn by means of a nickel-in-the-slot photograph machine recently patented by Mr. Pierre V. W. Welsh, of New York City. The operation, so far as relates to the exposure, development and fixing of the picture, is entirely automatic, and the little picture which the machine throws out, after a momentary washing, appears to be a marked success over previous efforts in this direction, as judged by the excellence of the work and the rapidity with which it is effected.

"The monster on your TV set"

I wish I knew the exact date on this one. I assume it's some time in the early to mid-70s, late enough that cable TV and services like HBO were clearly on the horizon, they still seemed like something that might be pushed back. I also suspect it was before or at best shortly after the multiplex model took hold.

Eventually, increasingly ginormous home video screens, mobile streaming, and other innovations will probably kill the movie theater as a mainstream venue, but I suspect the industry watchers of 50 or so years ago would have been surprised at how well the basic business model has held up.

Thought for the day

From Paul Krugman [emphasis added]:

What the freshwater school did was to take the actual experience of business cycles and say, “We don’t see how to formalize this experience in terms of maximizing equilibrium models; therefore it doesn’t exist.” It only looks as if recessions result from inadequate demand and that monetary or fiscal expansion can create jobs; our models tell us that can’t happen, so it’s all an optical illusion.

...

Anyway, this isn’t about me (well, it sort of is, but never mind.) The important point shouldn’t be “don’t formalize”; it should be that formalism is there to open your mind, not close it, and if the real world seems to be telling you something inconsistent with your model, the problem lies in the model, not the world.

If you have Netflix's PR budget, your own journalistic genre is just one of the things you can buy.

The following showed up in the "Recommended by Pocket" links in my Firefox browser. To be perfectly honest, I only clicked on it because I was looking for a jumping off point from which to discuss the extraordinary PR efforts of Netflix. For that purpose, the article was even better than I had hoped.

First, a few points about what the film Evolution isn't.

It isn't new. It came out in 2015 and was widely and generally positively reviewed. If you're into this kind of art-house horror film, there's a good chance you've already seen it and a very good chance you've already heard about it.

It isn't a Netflix original.

It isn't even exclusive to Netflix. In addition to the DVD, you can buy it online for $3.99 from iTunes or Amazon or a number of other vendors.

 Given all of this, why is the availability of this film on Netflix newsworthy? The short answer is that it's not. Basically it's an ad for Netflix disguised as a piece of news. Probably unpaid for and unintentional, but still an ad. What's more, it's actually part of a series of ads for Netflix running at GQ.

We have all gotten so accustomed to the what's-on-Netflix genre that the strangeness no longer registers. There is tons of great (and I mean that without hyperbole) content out there. There is no good journalistic reason why being on Netflix is any more newsworthy than being on CBS.com or Film Struck or PBS.org or the Internet Archive or even MeTV (I would actually make the case that Neil Simon's work under Nat Hiken on the Phil Silvers Show was more noteworthy than most of the Netflix films GQ chose to write).

To be hammer-blunt, what's-on-Netflix is a genre because the company has spent hundreds of millions of dollars on PR hacks who have spent countless hours planting and pushing these stories. It was a tremendous amount of money, but it was well spent. Netflix is now worth more than Disney because it has been more successful than any of its competitors at generating hype. The editors at GQ deserve a small part of the credit for this and, should the company implode leaving a pile of badly burned investors, they also might deserve a comparable share of the blame.

I'm afraid even the Brothers Grimm would have found Bitcoin a little too fantastic

I'm edging closer to the notion that the tools which we would normally use to critique journalism are no longer up to the task of discussing the 21st century technology narrative. Instead, the appropriate methods are probably those of the folklorist. We are rapidly approaching the realm of the myth and the tall tale. Why not start thinking in those terms?

It is standard practice when discussing something like a Jack tale to list the Aarne–Thompson classification. For example, Jack in the beanstalk fall under the classification AT 328 ("The Treasures of the Giant"). We could do something similar with the vast majority of tech reported. TakeTheranos. This and other accounts of college dropouts supposedly coming up with some amazing innovation can be classified under "wayward youth finds magic object."

 I've been getting quite a bit of thought recently to how magical heuristics have come to dominate the conversation about technology and innovation, but the idea of actually treating the narrative as folklore didn't hit me until I read this:

The paperclip maximizer is a thought experiment described by Swedish philosopher Nick Bostrom in 2003. It illustrates the existential risk that an artificial general intelligence may pose to human beings when programmed to pursue even seemingly-harmless goals, and the necessity of incorporating machine ethics into artificial intelligence design. The scenario describes an advanced artificial intelligence tasked with manufacturing paperclips. If such a machine were not programmed to value human life, then given enough power its optimized goal would be to turn all matter in the universe, including human beings, into either paperclips or machines which manufacture paperclips.[4]

    Suppose we have an AI whose only goal is to make as many paper clips as possible. The AI will realize quickly that it would be much better if there were no humans because humans might decide to switch it off. Because if humans do so, there would be fewer paper clips. Also, human bodies contain a lot of atoms that could be made into paper clips. The future that the AI would be trying to gear towards would be one in which there were a lot of paper clips but no humans.
    — Nick Bostrom, "Ethical Issues in Advanced Artificial Intelligence", 2003

Bostrom has emphasised that he does not believe the paperclip maximiser scenario per se will actually occur; rather, his intention is to illustrate the dangers of creating superintelligent machines without knowing how to safely program them to eliminate existential risk to human beings. The paperclip maximizer example illustrates the broad problem of managing powerful systems that lack human values

Suddenly it struck me that this was just the magic salt mill ever so slightly veiled in cyber garb. In case you're not up on your folklore...

It is Aarne-Thompson type 565, the Magic Mill. Other tales of this type include The Water Mother and Sweet porridge.

Synopsis

A poor man begged from his brother on Christmas Eve. The brother promised him, depending on the variant, ham or bacon or a lamb if he would do something. The poor brother promised; the rich one handed over the food and told him to go to Hell (in Lang's version, the Dead Men's Hall; in the Greek, the Devil's dam). Since he promised, he set out. In the Norse variants, he meets an old man along the way. In some variants, the man begs from him, and he gives something; in all, the old man tells him that in Hell (or the hall), they will want to buy the food from him, but he must only sell it for the hand-mill behind the door, and come to him for directions to use it. It took a great deal of haggling, but the poor man succeeded, and the old man showed him how to use it. In the Greek, he merely brought the lamb and told the devils that he would take whatever they would give him, and they gave him the mill. He took it to his wife, and had it grind out everything they needed for Christmas, from lights to tablecloth to meat and ale. They ate well and on the third day, they had a great feast. His brother was astounded and when the poor man had drunk too much, or when the poor man's children innocently betrayed the secret, he showed his rich brother the hand-mill. His brother finally persuaded him to sell it. In the Norse version, the poor brother didn't teach him how to handle it. He set to grind out herrings and broth, but it soon flooded his house. His brother wouldn't take it back until he paid him as much as he paid to have it. In the Greek, the brother set out to Constantinople by ship. In the Norse, one day a skipper wanted to buy the hand-mill from him, and eventually persuaded him. In all versions, the new owner took it to sea and set it to grind out salt. It ground out salt until it sank the boat, and then went on grinding in the sea, turning the sea salty.

I realize Bostrom isn't proposing this as a likely scenario. That's not the point. What matters here is that he and other researchers and commentators tend to think about technology using the specific heuristics and motifs people have always used for thinking about magic, and it worries me when I start recognizing the Aarne–Thompson classifications for stories in the science section.

The name has always been synonymous with hype

We've been rough on Tesla lately, but this is too good to pass up.

From Scientific American:

Cryptocurrencies: Last Week Tonight with John Oliver

“Everything that exists is going to be better.”

I have queued the video up to a clip in the middle. It shows a very slick ad for a pump and dump scheme that really has to be seen to be believed. It's actually not the best part of the episode – – that would come closer to the end – – but if you only have a couple of minutes, this is the part you want to watch.

Oliver's shows have a tendency to build. They generally spend the first 10 minutes or so setting an informative and balanced framework interspaced with a few jokes to keep things from getting too dry. The opening framework provides important nuance and context which allows them to bring out really absurd and infuriating clips without simply playing them for shock value.

Regular readers will recognize lots of familiar elements here. Cryptocurrencies run almost entirely on magical heuristics. There's virtually no way to justify their value based on conventional logic and economic principles. Instead, the narrative is driven entirely by things like the magic of association, faith and language, the belief that we are entering an age of great upheaval but one which will richly reward the faithful. It's like you distilled hype and bullshit and mystical thinking of every Silicon Valley startup into a pure essence of nonsense.