Watch and discuss
Watch and discuss
For the past couple of months I’ve been engaged in reporting on the nexus between major brands and pirate bit-torrent sites. It has been like lifting up a rock to see all the weird life forms crawling out of the light. The New York Times characterized the efforts to pin down who was responsible to Whack A Mole. But what really interested me is that the whole future of the advertising business seems to be based on the premise of what I call a Geo-Behavioral Targeting System. The implicit assumption is that consumers don’t care if Google, Facebook or an Ad Network has a total window into the most intimate details of your personal life, your finances, your aspirations and dreams. All the better to sell you your own future. In the futuristic novel,Super Sad True Love Story: A Novel, Gary Shteyngart posits a world in which your credit score, sexual preferences and other details are available to anyone who points their smartphone at you.
I was reminded of all this reading an piece by Evgeny Morosov in yesterday’s New York Times. Morosov has been a lonely voice in the wilderness, protesting against the rise of Techno-utopianism. In The Perils of Perfection, he worries about what the rise of the ubiquitous App Culture is doing to us.
LAST month Randi Zuckerberg, Facebook’s former marketing director, enthused about a trendy app to “crowdsource absolutely every decision in your life.” Called Seesaw, the app lets you run instant polls of your friends and ask for advice on anything: what wedding dress to buy, what latte drink to order and soon, perhaps, what political candidate to support.
Seesaw offers an interesting twist on how we think about feedback and failure. It used to be that we bought things to impress our friends, fully aware that they might not like our purchases. Now this logic is inverted: if something impresses our friends, we buy it. The risks of rejection have been minimized; we know well in advance how many Facebook “likes” our every decision would accumulate.
Jean-Paul Sartre, the existentialist philosopher who celebrated the anguish of decision as a hallmark of responsibility, has no place in Silicon Valley. Whatever their contribution to our maturity as human beings, decisions also bring out pain and, faced with a choice between maturity and pain-minimization, Silicon Valley has chosen the latter — perhaps as a result of yet another instant poll.
Maybe people don’t want the responsibility of making choices anymore. Maybe our whole lives should be crowdsourced. After all if my friends told me to do something, its not my fault if it turned out to be a stupid move.
Readers of this blog know that I believe that President Obama has been very effective in setting the course of the nation since his reelection. But I must point out that the news conference yesterday on the Sequester was pretty tone deaf.
President Obama on Tuesday painted a dire picture of federal government operations across the United States should automatic budget cuts hit on March 1: F.B.I. agents furloughed, criminals released, flights delayed, teachers and police officers laid off and parents frantic to find a place for children locked out of day care centers.
To say that an $85 billion cut out of a $3.7 Trillion budget is hardly cause for alarm. After the military budget doubled in 8 years under both Bush and Obama, reducing the Pentagon budget by 6% hardly qualifies for endangering our national security. This kind of scare talk should be left to John McCain and Lindsay Graham and will only backfire on the President when it turns out that the sky did not fall after the Sequester went through. Anyone who has run a business–big or small–knows that taking 5% out of a budget can be done without killing the enterprise. The Pentagon is the most bloated enterprise in America. These cuts can only help the lazy planners realize that we live in a new Post Empire World. The quicker the President realizes that fear mongering won’t work, the sooner we can get back to the real work of American Renewal.
For me, the place to start that strategic renewal is Patrick Doherty’s amazing essay in Foreign Policy, A New U.S. Grand Strategy.
The status quo is untenable. In the United States, the country’s economic engine is misaligned to the threats and opportunities of the 21st century. Designed explicitly to exploit postwar demand for suburban housing, consumer goods, and reconstruction materials for Europe and Japan, the conditions that allowed it to succeed expired by the early 1970s. Its shelf life has since been extended by accommodative monetary policy and the accumulation of household, corporate, and federal debt. But with Federal Reserve interest rates effectively zero, Americans’ debt exceeding their income, and storms lashing U.S. cities, the country is at the end of the road.
Abroad, Washington’s post-Cold War pattern of episodic adventurism and incremental crisis management only creates further uncertainty, and rising powers will not lead. Other major economies have little appetite for altering the global order and hence are doubling down on the old system, exacerbating trade imbalances and driving record resource extraction. As commodity prices rise, global powers are hedging ever more aggressively — stockpiling resources and increasingly becoming entangled in conflicts in resource-rich areas. As the global economy falters, unrest rises and the great unresolved conflicts of the 20th century — the Middle East, South Asia, North Korea, Taiwan — grow increasingly enmeshed in the power dynamics of this new era.
Simply put, the current U.S. and international order is unsustainable, and myriad disruptions signal that it is now in a process of collapse. Until the United States implements a new grand strategy, the country will face even more rapid degradation of domestic and global conditions.
Read the whole essay and then let’s discuss. May we live in exciting times.
When I was 20 years old in January of 1969 and a senior at Princeton, I went to work for The Band as their first tour manager. At the time most of the American music that was being played on the FM stations came out of San Francisco and Los Angeles–Jefferson Airplane, Grateful Dead, Big Brother and the Holding Company, The Doors, Buffalo Springfield, The Byrds. The whole aesthetic of The Band was from a parallel universe, located somewhere between the fiction of Faulkner and Willa Cather, the blues of Muddy Waters and Sonny Boy Williamson, the photography of Walker Evans and Robert Frank and the harmonies of the Carter Family.
It was an aesthetic that endured and I spent last weekend immersed in it at the end of Grammy week. On Friday I went to the Musicares tribute to Bruce Springsteen. The highlights of the night were provided by the young bands that are directly in the genetic line of The Band–The Alabama Shakes, Mumford and Sons and The Zac Brown Band (with Mavis Staples sitting in).
It was this same music that dominated the Grammy show on Sunday night. Mumford and Sons won Album of the Year, The Lumineer’s, Black Keys, Zac Brown and Jack White all played brilliantly. Every bit of the music was real and the world of Auto-tune was banished from the stage. For me the final tribute to Levon Helm of The Band brought the rhythms of life full circle. Zac, Mavis, and the Mumfords did a wonderful version of “The Weight”, which was a fitting end to a great night of Americana.
A continuing source of frustration for many Americans has been the fact that no one on Wall Street has gone to jail for the mortgage fraud that nearly crashed the world financial system in 2008. But in the last three weeks the dam has broken and the indictments are beginning to emerge. It may have taken a long time, but perhaps the departure of Tim Geithner, the boy with his finger in the dyke, will signal a new attitude by the Obama administration towards the Wall Street Miscreants.
The first step was the amazing Frontline episode The Untouchables, which depicted a craven Assistant Attorney General, Lanny Breuer, who went out of his way to protect the bankers, fearing an indictment would crash the financial system. Soon after the program aired, Breuer announced he was returning to private practice, probably to represent the big banks.
Next came the Department of Justice suit against Standard and Poors for their outrageous rating as AAA, securities that they knew were junk. The suit quotes internal S & P emails.
“Rating agencies continue to create an even bigger monster — the C.D.O. market,” one S.& P. employee wrote in an internal e-mail in December 2006. “Let’s hope we are all wealthy and retired by the time this house of card falters.”
Another S.& P. employee wrote in an instant message the next April, reproduced in the complaint: “We rate every deal. It could be structured by cows and we would rate it.”
Finally comes word this morning that Jamie Dimon and his pals at JP Morgan Chase were just as involved in mortgage fraud as any other bank, despite Dimon’s attempt to paint himself as the good guy during the 2008 meltdown.
According to the court documents, an analysis for JPMorgan in September 2006 found that “nearly half of the sample pool” — or 214 loans — were “defective,” meaning they did not meet the underwriting standards. The borrowers’ incomes, the firms found, were dangerously low relative to the size of their mortgages. Another troubling report in 2006 discovered that thousands of borrowers had already fallen behind on their payments.
But JPMorgan at times dismissed the critical assessments or altered them, the documents show. Certain JPMorgan employees, including the bankers who assembled the mortgages and the due diligence managers, had the power to ignore or veto bad reviews.
The real problem with establishment types like Tim Geithner and Lanny Breuer is that they went to Ivy League schools and couldn’t imagine that their establishment peers would possibly commit fraud. And even if they saw evidence of the fraud, then preserving The System became more important then sending their classmates to jail. President Obama bought into that establishment trope in his first term. He surrounded himself with people like Geithner, Larry Summers and Bob Gates. But I sense something has changed. The appointment of Mary Jo White to head the SEC could be a sign that heads are going to role, but the real change will come from more lawsuits filed like the S & P case. Certainly the other ratings services, Moody’s and Fitch, are equally guilty of pay to play services. One of Obama’s greatest legacies could be a real financial reform agenda.
The markets got a bit spooked today by the unexpected drop in GDP for the final quarter of 2012. But buried in the numbers are signs of a positive transition from a war to a peace economy.
The drop in gross domestic product was driven by a plunge in military spending, as well as fewer exports and a steep slowdown in the buildup of inventories by businesses…Despite the overall contraction, there was underlying data in the report suggesting the economy is not on the brink of a recession or an extended slump. Residential investment jumped 15.3 percent, a sign that the housing sector continues to recover, for one. Similarly, investment in equipment and software by businesses rose 12.4 percent, an indicator that companies are still spending.
I continue to be very optimistic about the direction of American policy as we emerge from our eight year Interregnum. Imagine if the 11 million undocumented workers emerged from the underground (cash) economy and started paying taxes. What would that do to the actuarial calculations of Social Security and Medicare? Imagine if Lockheed Martin started to manufacture wind turbines instead of fighter jets.
The greatest task of the next ten years will be Economic Conversion, the process of converting from a military economy to a civilian/peace economy. The economist Seymour Melman, who did the most important work on this subject, noted that the task ahead of us will not be easy.
“The problem of conversion from military to civilian work is fundamentally different now from the problem that existed after World War II. At that time, the issue was reconversion; the firms could and did go back to doing the work they had been involved in before the war. They could literally draw the olds sets of blueprints and tools from the shelf and go to work on the old products. At the present time, the bulk of military production is concentrated in industries, firms, or plants that have been specialized for this work, and frequently have no prior history of civilian work”
A larger part of the problem will be that the Military Industrial complex is situated deeply in the Red States, particularly Texas and the Deep South. Alex Bowles has pointed out to me that this could create even more Anti-Obama anger. Any attempt to pacify the South with some sort of Government aid to ease the Conversion, will be met with resistance.
The upshot is the mollifying the GOP will be easier said than done. Their response to the last election (“We’ll just rig the next one”) makes their contempt for both outsiders and democracy explicit. They are becoming, in a very real sense, un-American in that the overarching ideal of Government of, by, and for the people is becoming the focal point for organized rage directed at both the government and the people.
Increased investment drives economic growth, while retrenched investment leads to recession and reduced employment–and it always has. Those who blame our stagnation on a lack of consumer demand rely on a toxic brew of dubious data and dangerous theory.
It seems to me that the American public has already made a shift to a culture in which spending at the mall will be a lot less important and yet the politicians are acting like their job is to restore the status quo ante–a world the public no longer cares about. Larry Summers talks about getting the big banks lending again, but what business wants to borrow when there is so much excess capacity? There are too many damn malls. Too many car dealerships. What person in their right mind would start a new retail clothing business today?
I must say I am looking forward to the President’s second Inaugural Address on Monday. In my lifetime there have only been two second term Democratic presidencies and Bill Clinton began his second term with the shadow of the Whitewater and Trooper gate allegations hanging over him. He had already begun his dalliance with Monica Lewinsky, and so the events that led to his impeachment were already in motion. Barack Obama on the other hand begins his second term with a much bigger mandate (51% of the popular vote to Clinton’s 49%) and no threat of scandal.
Equally important, the Republican Party is in complete disarray, as can be seen by their cave in today on the debt ceiling. David Brooks wrote an unintentionally humorous column today complaining that Obama is being too tough on the Republicans at the very moment of their meltdown. After laying out how he would hope Obama might propose some small bore initiatives that Eric Cantor could agree on, Brooks then states he doesn’t think that is going to happen, unintentionally laying out a perfect strategy for the Democrats..
It’s more likely that today’s majority party is going to adopt a different strategy, which you might call Kill the Wounded. It’s more likely that today’s Democrats are going to tell themselves something like this:
“We live at a unique moment. Our opponents, the Republicans, are divided, confused and bleeding. This is not the time to allow them to rebuild their reputation with a series of modest accomplishments. This is the time to kick them when they are down, to win back the House and end the current version of the Republican Party. Continue reading
I noticed a lot of comments on the suicide of young Aaron Swartz on my last post. It’s a tragedy when anyone takes their own life and I can’t really write about the issues surrounding the legal case he was involved in because I’m tired of dealing with the Mob– the idiots that send me emails saying “Why don’t you shove a nail in your ass” after we released our report on Ad Networks and Piracy. The problem with the copyleft is that they can’t imagine someone actually having to go to jail for stealing intellectual property. That was probably part of Aaron’s problem. It never occurred to him that breaking into a server was the equivalent of breaking into a house. He had a history of depression and wrote romantically about suicide in the comic book movies he loved. He seemed like a very generous soul. But he was clearly not ready to go to jail.
But the fact that I feel constrained to speak my mind about piracy because I am tired of the mob is sad. Last year I wrote about my friend David Fanning having his whole web enterprise destroyed by Lulzsec because his show Frontline reported on the darker side of Julian Assange’s sense of morality. I know for a fact that most musicians are scared to speak out about having their content exploited by criminals like Kim Dotcom, because they are afraid of the cyber mob. I don’t know how the hell we are going to have a civil conversation about IP with those of us who want to defend the artist’s right to get paid for their work, being under the threat of bodily harm (note that most of the most threatening comments have been taken down)?
Andrew O’Hehir’s latest essay in Slate is pretty damn provocative. It’s titled Welcome to the New Civil War and it pulls no punches.
So even though it’s a truism of American public discourse that the Civil War never ended, it’s also literally true. We’re still reaping the whirlwind from that long-ago conflict, and now we face a new Civil War, one focused on divisive political issues of the 21st century – most notably the rights and liberties of women and LGBT people – but rooted in toxic rhetoric and ideas inherited from the 19th century.
We’ve just emerged from a presidential campaign that exposed how hardened our political and cultural divide has become, and how poorly the two sides understand each other. Part of the Republican problem, in an election that party thought it would win easily, was that those who felt a visceral disgust toward both the idea and the reality of President Barack Obama simply could not believe that they didn’t represent a majority. As many Republicans are now aware, the party now faces an existential crisis. It’s all very well to go on TV and talk about attracting Latinos and downplaying cultural wedge issues. But the activist core of the Republican Party is neo-Confederate, whether it thinks of itself that way or not. It isn’t interested in common cause with Mexicans or turning down the moral thermostat. Just ask Rick Santorum: What it wants is war.
As anyone who has read this blog for a while knows, I believe in a certain power that comes from regionalism. I think the notion that California has a different economy and culture than Georgia is OK and that as Justice Brandeis said, “It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”
But O’Hehir’s essay raises another larger question, which is what happens when individual states circumscribe the rights of individuals in areas like abortion or gay rights? As Alex Bowles wrote to me, “so while decentralization improves decision making in many, many areas, there are some things—like equality before the law—that are no longer subject to debate. To the extent that humanity is universal, there’s no need for regional considerations to enter the picture.”
So this begs the question. Is it possible to have the kind of decentralized regional experimentation that I think leads to innovation while still preserving that Federal power to enforce “equality under the law” for gays, women, immigrants and minorities? I think this is what has to happen, but it may take a showdown with the neo-confederates before it happens.
Here is a speech I gave last month to the Chattanooga Chamber of Commerce. It is as close to my “philosophy of everything” as you will get.