Matt Taibbi gets it. What do you call people who don’t believe anything unless it’s published in the New York Times? Democrats. What do you call people who believe everything broadcast on Fox News? Republicans.

We don’t do that now. The story is no longer the boss. Instead, we sell narrative, as part of a new business model that’s increasingly indifferent to fact.

When there were only a few channels, the commercial strategy of news companies was to aim for the whole audience. A TV news broadcast aired at dinnertime and was designed to be consumed by the whole family, from your crazy right-wing uncle to the sulking lefty teenager. This system had its flaws. However, making an effort to talk to everybody had benefits, too. For one, it inspired more trust. Gallup polls twice showed Walter Cronkite of CBS to be the most trusted person in America. That would never happen today.

After the Internet arrived and flooded the market with new voices, some outlets found that instead of going after the whole audience, it made more financial sense to pick one demographic and dominate it. How? That’s easy. You feed the audience news you know they will like. When Fox had success targeting suburban and rural, mostly white, mostly older conservatives – the late Fox News chief Roger Ailes infamously described his audience as “55 to dead” – other companies soon followed suit.

Now everyone does it. Whether it’s Fox, or MSNBC, or CNN, or the Washington Post, nearly all Western media outlets are in the demographic-hunting business. This may be less true in Canada, where there’s a stronger public media tradition, but in the U.S., it’s standard.

The problem with that, of course, is that the truth isn’t necessarily what you like or what your preferred outlets publish. And the truth is important. Policies founded on false assumptions and phony facts can’t work.
Eternal verities remain. People engage in purposeful action. They respond to incentives. They don’t always do so instantaneously and their responses sometimes are not effective but the incentives do matter. People have different preferences and act to further those preferences in different ways.

I thought this post at Heisenberg Report about the shakeup in the cryptocurrency industry raised some interesting point.

In the wake of the FTX fiasco, much of the breathless crypto coverage emanating from the financial media (mainstream, alternative and otherwise), seems to intentionally avoid addressing the elephant in the room. If that’s the case, it’s understandable. Because to address it would be to concede that nearly everyone — from large media conglomerates to the most respected venture capitalists on the planet to storied hedge funds — was duped into believing that all it took to make the private money business viable was a single innovation.

That’s plainly absurd. For one thing, some experts offer trenchant arguments against the idea that blockchain constitutes a “technology” at all, if technology is supposed to be synonymous with true innovation. Even if it is an innovation, many skeptics argue it’s not an especially useful one. In the interest of brevity, I won’t walk through those arguments, but you can certainly do so yourself if you have Google and half an hour to spare.

Beyond that, though, the notion of private money at scale, and, more to the point, the notion of private money at scale as an investable proposition, is stupid. Not “misguided,” not “misplaced” and not any other more generous adjective either. Just plain old stupid.

Bitcoin as a digital form of “outside money” (so, like gold, only not tangible) makes some measure of sense. The rest of it not so much.

Here’s my question. Let’s assume that what’s going on right now is an actual shakeup in the sector, more than just a blip on cryptocurrency’s blast into the stratosphere. Does it have broader implications?

To some degree that depends on the degree to which cryptocurrency has been attracting participants (I hesitate to say “investors”) who wouldn’t have participated in anything else. If all of the participants were uniquely attracted to cryptocurrency then, no, the shakeup wouldn’t have ramifications beyond the sector itself.

However, if cryptocurrency managed to attract investment that would otherwise have gone somewhere else, a general loss of confidence in cryptocurrencies might will have ramifications throughout the technology sector. Furthermore, the number of developers working actively on cryptocurrency projects is estimated as something between 8,000 and 11,000. That’s not a large number in the total scheme of things but those developers need to be considered another cadre of developers out of work along with the layoffs announced at Amazon, Meta, Twitter, Salesforce, Oracle, Microsoft, etc.

I found this research from Duke University, reported on by Dan Vahaba at Duke Today interesting:

While being or becoming overweight during pregnancy can have potential health risks for moms, there are also hints that it may tip the scales for their kids to develop psychiatric disorders like autism or depression, which often affects one gender more than the other.

What hasn’t been understood however is how the accumulation of fat tissue in mom might signal through the placenta in a sex-specific way and rearrange the developing offspring’s brain.

To fill this gap, Duke postdoctoral researcher Alexis Ceasrine, Ph.D., and her team in the lab of Duke psychology & neuroscience professor Staci Bilbo, Ph.D., studied pregnant mice on a high-fat diet. In findings appearing November 28 in the journal Nature Metabolism, they found that mom’s high-fat diet triggers immune cells in the developing brains of male but not female mouse pups to overconsume the mood-influencing brain chemical serotonin, leading to depressed-like behavior.

In mice the male offspring of mothers on a high-fat diet experienced a depression-like condition while the female offspring were “less social”. The finding has been confirmed in human, at least after a fashion:

To see whether this may be true of humans as well, Ceasrine teamed up with Susan Murphy, Ph.D., a Duke School of Medicine associate professor in obstetrics and gynecology, who provided placental and fetal brain tissue from a previous study. Just as the researchers observed in mice, they found that the more fat measured in human placental tissue, the less serotonin was detected in the brains of males but not females.

An article in Financial Times by Simon Kuper reveals the conundrum in which the Netherlands finds itself. For the Netherlands, probably the most country most keyed into a globalized economy, to keep growing it needs more workers and the country has nowhere to put more people.

With hindsight, the Netherlands was too well-suited to the era of globalisation. The trading nation with Europe’s biggest port experienced 26 years of unbroken economic growth until 2008, then a world record. Now it tops ETH Zurich’s KOF Globalisation Index as the world’s most globalised country.

And so its population mushroomed. When the counter hit 14 million in 1979, Queen Juliana said, “Our country is full.” In 2010, Statistics Netherlands said the population would probably never reach 18 million. Today it’s 17.7 million and rising. The country has 507 people per sq km, nearly five times the EU’s average. Worse, the quantity of liveable land will shrink due to a paradoxical mix of rising seas and droughts damaging the foundations of houses.

But the Dutch economy’s demand for new workers seems insatiable. Eighty-four per cent of employers report labour shortages, one government study found. Recruitment signs are almost standard in shop windows. Employers even offer new recruits free holidays. 

The mode age in the Netherlands appears to be around 50. With 60% of the labor force working part-time or in temp positions it seems pretty clear that its government policies have had some perverse consequences.

The Federal Housing Finance Agency has released its report of the year-on-year changes in housing prices for the third quarter of 2022. Here are some snippets:

House prices rose in all 50 states and the District of Columbia between the third​ quarters of 2021 and 2022. The five areas with the highest annual appreciation were: 1) Florida 22.7 percent; 2) South Carolina 18.4 percent; 3) Tennessee 17.9 percent; 4) North Carolina 17.4 percent; and 5) Georgia 16.7 percent. The areas showing the lowest annual appreciation were: 1) District of Columbia 1.8 percent; 2) Oregon 7.6 percent; 3) California 7.6 percent; 4) Minnesota 7.7 percent and 5) Louisiana 8.3 percent.

and

House prices rose in all but two of the top 100 largest metropolitan areas over the last four quarters. Annual price increase was greatest in North Port-Sarasota-Bradenton, FL, where price increased by 29.2 percent. Two metropolitan areas that experienced price declines are San Francisco-San Mateo-Redwood City, CA and Oakland-Berkeley-Livermore, CA, where prices decreased by 4.3 percent and 0.6 percent, respectively.

Since the annualized inflation rate is 8.5%, that means that the five areas showing the lowest appreciation are all showing real price declines. Note, too, that this report does not reflect the impact of major technology sector layoffs. Those will certainly influence The San Francisco-San-Mateo-Redwood City and Oakland-Berkeley-Livermore metropolitan areas. Translation: expect more declines to come. Perversely, since in California changes in real estate tax rates don’t take effect until a house changes hands, not only may that make houses harder to sell it will increase tax revenues on those that do sell.

At 19FortyFive Andrew Michta provides his advice on ensuring that NATO isn’t “sucked into” the war in Ukraine:

The Przewodów incident has also demonstrated that while the West has sought to keep the war in Ukraine contained, such an approach may only be possible if Ukraine is given the requisite offensive capabilities to even out the odds.

As things stand, Russia continues to enjoy a unidirectional advantage, where the fighting and, most importantly, the suffering of the civilian population is taking place overwhelmingly in Ukraine and by Ukrainians.

In reality, if we are to have reasonable expectations that the Russians may eventually recognize and acknowledge that victory in Ukraine is simply unattainable, this will have to be the result of a cost-benefit calculus, whereby the expenditure of resources to continue pursuing Putin’s neo-imperial folly is coupled with even more significant Russian losses on the battlefield and finally some real pain at home.

Will that actually accomplish the stated goal? Or is he just leaving his complete goals unstated? That is, are his goals to ensure that Russia does not win outright in Ukraine without direct NATO intervention? That sounds like the case to me.

So far supplying the Ukrainians and providing tactical and logistical support have helped in preventing the Russians from winning outright. It has also ensured that Russia is doing what John Mearsheimer predicted. Its strategy appears to be to “wreck Ukraine”.

In a piece at The New Republic Walter Shapiro argues that voters are more polarized now that at any other time in American history:

The current level of sustained political balance in Congress is unprecedented.

Since the Civil War, there never have been back-to-back congressional elections in which the margins in both the House and the Senate were this tight. The closest parallel came during the George W. Bush years, when neither party had more than 51 votes in the Senate from 2001 to 2005. But thanks to the Republicans gaining House seats in the 2002 election (largely because of the rally-around-the-flag aftermath of the September 11 attacks), House Speaker Denny Hastert possessed more breathing room than Kevin McCarthy (or whoever arises from the coming GOP chaos) will have in January.

Looking at a map of the United States, Democrats might understandably feel anxious. The small-state bias in the Senate (and, as a result, the Electoral College) prompted Mother Jones’s Ari Berman to calculate that 30 Republican senators hail from 15 states whose population collectively is smaller than California with its two Democratic senators. The 2024 Senate map makes these calculations seem even more daunting with Democrats having to defend such ruby-red states as Montana (Jon Tester), Ohio (Sherrod Brown), and West Virginia (Joe Manchin).

Small wonder that smart political commentators assume that the current status quo will continue ad infinitum. Writing for CNN, Ron Brownstein anticipated that the 2024 presidential race (no matter who is on the ballot) will again come down to Arizona, Georgia, Nevada, and Wisconsin. As Brownstein put it, “Each side in an intensely polarized nation of 330 million recognizes that the overall direction of national policy now pivots on the choices of a minuscule number of people living in the tiny patches of contested political ground—white-collar suburbs of Atlanta and Phoenix, working-class Latino neighborhoods in and around Las Vegas and the mid-sized communities of the so-called BOW counties in Wisconsin.”

I don’t think that’s what’s been happening at all. I think that

1. Information and technology have made gerrymandering more successful than at any other time in American history.
2. The party leadership in both political parties, largely driven by money, have become more extreme.
3. Both parties, driven by the extreme politics of their leaderships, are being transformed into programmatic parties—something they’ve never been before.
4. The stakes as measured by the power and reach of the federal government are higher than ever before.

The net outcome is that voters have largely retained the views they’ve been holding while the parties are decreasingly representative of those views. As evidence for that I’d submit the decreasing party roll for both parties and the increasing number of those who identify themselves as independents.

I’m not very sanguine about fixing that. There are all sorts of things that might help like increasing the size of the House, divvying up some of the states, reducing the power of the Congressional leadership, and cracking down on gerrymandering. Under a system with representation based on geographical-based districts is it really too much to ask that the districts be geographically based? Here’s the 2022 Illinois Congressional district map:

As should be obvious it’s one gerrymander after the other. Grotesquely so. Adopting the measures above might have the effect of moderating both parties as they actually needed to compete for votes.

But the incentives would remain and the incentives point to large, corrupt, autocratic parties so that’s where we’re headed.

At The Conversation David Goldman concludes his analysis of the protests in China with this observation:

The key issues are how to move from the current “dynamic zero COVID” policy towards something else, and indeed what that should be, given the inadequate health coverage in much of the country.

I don’t rejoice in civil disorder in any country including China. I have no idea of how serious a challenge to the regime these protests are—I certainly won’t get that from our news media. IMO the situation is somewhat worse than is being portrayed. A significant component of the problem is the insistence on self-reliance. The Chinese authorities have steadfastly refused any vaccine that wasn’t developed in China and it is my understanding that, however limited in their effectiveness our vaccines may be, the Chinese vaccines are that much more limited. We’ll just need to see what materialized.

As long as China’s “zero COVID” policies remain in force and lockdowns remain a primary strategy, Chinese suppliers cannot be deemed reliable. That underscores what we should be doing anyway—nearshoring and onshoring the production of more of what we consume.

Update

Bill Hayton adds an interesting if dispiriting conclusion:

Anyone who doubts the Communist Party’s determination to remain the country’s sole political force clearly hasn’t been following events in Hong Kong, Xinjiang or anywhere else in China for the past decade. Whenever there has been a choice between control and disorder, the Party has chosen control, even at the expense of reduced economic growth and popular dissatisfaction. That is why, for all the bravery of the weekend’s anti-lockdown demonstrators, they will not succeed. Yes, the Party faces another systemic problem — but it will take more than a few photogenic protests to make them change course.

There has been quite a bit of pontification about Elon Musk’s activities at Twitter. I won’t remark one way or the other because a) I don’t know anything about Twitter’s internal operations and b) I don’t really care.

It does bring to mind one thing, however, which I thought I’d pass along. There are risks in downsizing. Quite a while ago IBM conducted a study in which they found, possibly counterintuitively, that you may not increase productivity by downsizing.

In tech companies in particular it is a commonplace that a rather small percentage of staff are doing a remarkable amount of the actual work. You might think that lots of money can be saved by getting rid of the relatively unproductive and only holding on to the superproducers. In turned out it doesn’t work that way. There are social aspects to companies; people are not interchangeable parts. Sometimes what happens when you get rid of everybody but the superproducers is that the superproducers stop being so super. For one thing those apparently superfluous staff members may be allowing the superproducers to focus on what they’re good at and what they like to do.