29 September 2022

The New York Times: “Strong Dollar is Good for the US but Bad for the World”

For the rest of the world, it’s a no-win situation, said Eswar Prasad, an economics professor at Cornell and author of several books on currencies. At the same time, he said, the Fed has no choice but to act aggressively to control inflation: Any delay in action could make things potentially even worse.

Policy decisions made in Washington frequently reverberate widely. The United States is a superpower with the world’s largest economy and hefty reserves of oil and natural gas. When it comes to global finance and trade, though, its influence is outsize.

That is because the dollar is the world’s reserve currency — the one that multinational corporations and financial institutions, no matter where they are, most often use to price goods and settle accounts. Energy and food tend to be priced in dollars when bought and sold on the world market. So is a lot of the debt owed by developing nations. Roughly 40 percent of the world’s transactions are done in dollars, whether the United States is involved or not, according to a study done by the International Monetary Fund.

Patricia Cohen

The decision of the European Central Bank to continue to raise interest rates has been criticized, at least among the people I follow on Twitter, and on some level I understand those arguments. Recent inflationary pressures in Europe originate predominantly from higher energy prices and supply chain disruptions, factors that can hardly be influenced by the monetary policies of individual countries. Solutions for these issues require medium term restructuring and investments, not in the scope of central banks – and rising interest rates can even cause adverse effects by dampening financing opportunities for investments.

15 September 2022

Gizmodo: “Silicon Valley’s Push into Transportation has been a Miserable Failure”

Marx: But it’s not just that it would become a huge revenue stream that would transform the business, it’s more just that I think there’s this general faith in technology and the way that technology develops and that they can achieve these things. Because I would say it’s not just Google who had that faith in self-driving technology, all these companies who are working on it did to a certain degree, and really believed that it was something that they were going to be able to figure out and make a reality within a few years. Then they had to be hit with the hard reality of how difficult to realize their goal actually was. I think it just speaks to a bigger kind of faith in technology that exists within many of these companies and even the society as a whole, to a certain degree, that you just kind of turn these big data sets toward what you want to achieve. And they eventually figure it out. And time and time again, I think we’re seeing that’s not really being realized.

I think it also goes back to what I was saying earlier in terms of the distraction that Elon Musk has achieved really effectively. To try to distract from real solutions to the problems that the automobile has created and things that would require less car dependence and to actually offer people alternatives to the car and to instead kind of intervene and say, no, actually, I have these ideas that are going to be even better than that, and we should pursue those instead to try to sap energy from alternatives. So the Hyperloop, for example, he admitted to his biographer that the reason the Hyperloop was announced—even though he had no intention of pursuing it—was to try to disrupt the California high-speed rail project and to get in the way of that actually succeeding.

Rhett Jones

I rarely find articles I can agree with almost unconditionally, and this is one of those rare examples. It covers multiple aspects of transportation, from the environmental issues of electric vehicles (particulate pollution from tire wear and dust, and the fact that the electricity consumed generally does not come from renewable sources), to Uber’s unsustainable business model, to Musk’s numerous initiatives that instead of solving practical issues aim to entrench the use of automobiles and thus benefit Musk’s business at Tesla.

14 September 2022

The Guardian: “‘It’s the way the industry is going’: how YouTube is transforming podcasting”

A study by market research firm Cumulus published in May found YouTube is already the most popular platform for podcasts. It won the market without really trying; now, it’s getting serious. The company has launched a dedicated beta podcast landing page, hired a podcast executive to lead its efforts in the medium and offered popular podcasters and podcast networks grants of up to $300,000 to create video versions of their shows, according to Bloomberg.

It’s a sign of growing competition in the space that’s bad news for Spotify, which has invested about $1bn in podcasting in recent years. Even Gen Z’s beloved short-form video platform TikTok is thinking about launching a music service that would cover podcasts.

Much like the tendency of distantly related crustaceans to keep evolving into crabs, sooner or later platforms have a tendency to start cannibalising each other’s core features. This time, a medium is caught in the crossfire – raising the question of what differentiates a video podcast from the vlogs that YouTube first popularised.

Laurie Clarke

A common issue with platforms adding additional features is that after a point it starts having diminishing returns in terms of user experience. In the specific case of video podcasts I would even argue that a video component can actively diminish the experience of listening to a podcast. I listen to podcasts mostly in the background, while I’m doing chores around the house or while roaming around the city; in other words, when my ears are free to follow the discussion, while my eyes are paying attention to other things. Having to follow a visual story along with the audio track would be highly distracting to downright impossible – for example when crossing the street – so I would rather stop listening to podcasts than switch to video. I’m sure this applies to many other people and situations as well – you probably don’t want to stare at a screen while driving, but you might easily listen to a podcast, just as you would an audiobook or music.

12 September 2022

Time: “The Twitter Whistleblower Needs You to Trust Him”

Zatko had come from a long line of jobs where he had free rein to tear up organizational structures and prioritize security above all else. But at Twitter, current and former colleagues say, he found himself in a different environment: navigating tense internal politics at a corporation bent on boosting revenue, without support from his superiors. Some employees caught up in the tumult perceived Zatko to be a figure hired by then CEO Jack Dorsey for publicity reasons, stepping on the toes of qualified colleagues with more institutional knowledge. Technically brilliant and morally rigid, Zatko was an iconoclast stepping into a corporate bureaucracy. It’s like asking a doctor who’s been trained to do brain surgery to suddenly become a podiatrist, says a former Twitter colleague.

The polarized reactions to Zatko’s disclosures illustrate just how atypical a tech whistle-blower he is. Last year, Frances Haugen, a former Facebook product manager, disclosed tens of thousands of pages of internal company documents that revealed a company prioritizing profits over user safety. But readers didn’t have to take Haugen’s word for it; they could read the words of Facebook’s own safety teams. Zatko is different. As a former senior executive, he had a bird’s-eye view into Twitter’s decision-making, ultimately responsible for hundreds of staff in some of Twitter’s most high-priority work streams. But he didn’t release the same breadth of documentation as Haugen; while Zatko supplied some exhibits to support his claims, including internal emails, his partially redacted disclosures rely largely on his own credibility as one of the most celebrated figures in cybersecurity. He is implicitly asking the public to trust that his version of events is the correct one, and that Twitter is lying.

Billy Perrigo, Andrew R. Chow & Vera Bergengruen

That Twitter has major security holes was pretty evident back in 2017 when an employee deactivated Donald Trump’s personal account on their last day of work; and again in 2020 when teenagers temporarily hacked the accounts of Barack Obama, Joe Biden, Elon Musk, and other celebrities. As troubling as it may be to think that these security flaws remain uncorrected, I have a hard time believing Peiter Zatko’s allegations in the absence of hard evidence. Some of them don’t make much sense; others, such as regarding bots and spam, actually support Twitter’s position and reveal Zatko’s superficial understanding of internal processes.

10 September 2022

The New Yorker: “The Haves and the Have-Yachts”

For the moment, a gigayacht is the most expensive item that our species has figured out how to own. In 2019, the hedge-fund billionaire Ken Griffin bought a quadruplex on Central Park South for two hundred and forty million dollars, the highest price ever paid for a home in America. In May, an unknown buyer spent about a hundred and ninety-five million on an Andy Warhol silk-screen portrait of Marilyn Monroe. In luxury-yacht terms, those are ordinary numbers. There are a lot of boats in build well over two hundred and fifty million dollars, Jamie Edmiston, a broker in Monaco and London, told me. His buyers are getting younger and more inclined to spend long stretches at sea. High-speed Internet, telephony, modern communications have made working easier, he said. Plus, people made a lot more money earlier in life.

Thorstein Veblen, the economist who published “The Theory of the Leisure Class”, in 1899, argued that the power of “conspicuous consumption” sprang not from artful finery but from sheer needlessness. In order to be reputable, he wrote, it must be wasteful. In the yachting world, stories circulate about exotic deliveries by helicopter or seaplane: Dom Pérignon, bagels from Zabar’s, sex workers, a rare melon from the island of Hokkaido. The industry excels at selling you things that you didn’t know you needed. When you flip through the yachting press, it’s easy to wonder how you’ve gone this long without a personal submarine, or a cryosauna that “blasts you with cold” down to minus one hundred and ten degrees Celsius, or the full menagerie of “exclusive leathers”, such as eel and stingray.

But these shrines to excess capital exist in a conditional state of visibility: they are meant to be unmistakable to a slender stratum of society—and all but unseen by everyone else.

Evan Osnos

If I ever, by some vanishingly unlikely chance, become immensely rich, I can’t decide if I would prefer to own a private island, or a superyacht. The island would offer more living space and stability. A yacht on the other hand gives you more freedom: freedom to travel to nearly every corner of the world; freedom to escape sanctions and taxes by sailing into international waters and friendly ports; freedom to avoid extreme weather and the damages caused by global warming.

09 September 2022

The Wall Street Journal: “The Secret Talks that could have prevented the Apple vs. Facebook War”

In the years before the change, Apple suggested a series of possible arrangements that would earn the iPhone maker a slice of Facebook’s revenue, according to people who either participated in the meetings or were briefed about them. As one person recalled: Apple officials said they wanted to “build businesses together”.

One idea that was discussed: creating a subscription-based version of Facebook that would be free of ads, according to people familiar with the discussions. Because Apple collects a cut of subscription revenue for apps in its App Store, that product could have generated significant revenue for the Cupertino, Calif., giant.

The companies also haggled over whether Apple was entitled to a piece of Facebook’s sales from so-called boosted posts, said people familiar with the matter. A boost allows a user to pay to increase the number of people that see a post on Facebook or Instagram. Facebook, which considers boosts ads, has always contended that boosts are a form of advertising, in part because they are often used by small businesses to reach a bigger audience, said one of the people.

Apple, which doesn’t take a cut of advertising from developers, argued that Facebook boosts should be considered in-app purchases, according to a person familiar with the matter. Apple’s standard terms would entitle it to take a 30% share of those sales.

Salvador Rodriguez

Additional confirmation for something many people have been saying for a while: Apple’s supposedly privacy-focused changes to tracking on iOS are primarily a means to disadvantage competitors and grow its own ad business. While these secret negotiations with Facebook were not previously reported, pressuring other businesses, large and small, for a cut of their iOS revenues has become common practice for Apple – unless they sign a hefty licensing deal, as is the case with their Google search agreement.

Foreign Policy: “The Problem with being a Petrostate”

Since the end of World War II, the number of armed conflicts between states has plummeted. One group of countries, however, stands out in its continued aggression: oil-rich states, which have been at the heart of some of the most notorious and bloody conflicts in recent decades, from the Iran-Iraq War to the Soviet invasion of Afghanistan, from the Syrian civil war to the Russian invasion of Ukraine. No matter how you define a petrostate—whether you look at a state’s oil-derived wealth, its dependence on oil revenues, or its exports and relative importance to world markets—there is strong evidence that petrostates are more likely than other countries to start wars.

The question of why is trickier. The simplest explanation is wealth. Oil-wealthy states—which enjoy substantial income from their production of oil and natural gas—are in a lucrative business, one typically dominated by states themselves, which earn billions of dollars from the oil trade. From weapons to foreign aid to violent proxies, leaders of oil-wealthy states simply do not need to make the same budgetary trade-offs as non-resource-wealthy states.

This offers one potential explanation for oil-wealthy states’ tendency toward conflict: Their overconfident leaders mistake high military spending for actual capability. It also suggests an unfortunate corollary: Oil-wealthy states not only are more likely to start wars but may be more likely to lose them. Oil wealth may even cushion the negative impact of losing a war, providing ways to buy off segments of society and allowing a leader to maintain power despite repeated conflict losses.

Emma Ashford

Interesting analysis, and especially timely, considering the economic war between Russia as a large oil and gas supplier and the rest of Europe.

05 September 2022

Harper’s Magazine: “Empire Burlesque”

Ten months after Luce published his essay, the Japanese attacked Pearl Harbor, and the United States, which had already been aiding the Allies, officially entered the war. Over the next four years, a broad swath of the foreign policy elite arrived at Luce’s conclusion: the only way to guarantee the world’s safety was for the United States to dominate it. By war’s end, Americans had accepted this righteous duty, of becoming, in Luce’s words, the powerhouse… lifting the life of mankind from the level of the beasts to what the Psalmist called a little lower than the angels. The American Century had arrived.

Furthermore, liberal internationalists’ democracy-first strategy assumes a Manichaean model of geopolitics that is both inconsistent and counterproductive. For all their crowing about democracy, liberal internationalists have been just fine collaborating with dictatorships, from Saudi Arabia to Egypt, when it has served perceived U.S. interests. This will probably remain true, making any kind of democracy-first strategy a primarily discursive one. Nonetheless, discursively centering democracy could have drastic repercussions. Dividing the world into “good” democracies and “bad” authoritarian regimes narrows the space for engagement with many countries not currently aligned with the United States. Decision-makers who view autocracies as inevitable opponents are less likely to take their interests seriously and may even misread their intentions. This happened repeatedly in the Fifties and Sixties, when U.S. officials insisted that the very nature of the Soviet system made it impossible to reach détente. In fact, détente was only achieved in the Seventies, after decision-makers concluded that the Soviet Union was best treated as a normal nation with normal interests, regardless of its political structure. Once Americans adopted this approach, it became clear that the Soviets, like them, preferred superpower stability to nuclear war.

Daniel Bessner

Slightly amusing how the author himself acknowledges towards the end that the restrainers do not enjoy popular support for their proposed policies, instead in early 2020 91 percent of American adults thought that the U.S. as the world’s leading power would be better for the world, up from 88 percent in 2018.