It will hurt, and they'll scare us with the idea that it will hurt, but the secret is that we get to choose where it hurts - the same as how they've gotten to choose the winners and losers for the past two decades.
It will hurt, and they'll scare us with the idea that it will hurt, but the secret is that we get to choose where it hurts - the same as how they've gotten to choose the winners and losers for the past two decades.
"How Short Term Thinking Won" - https://youtu.be/qGwU2dOoHiY
The author argues that this con has been caused by three relatively simple levers: Low dividend yields, legalization of stock buybacks, and executive compensation packages that generate lots of wealth under short pump-and-dump timelines.
If those are the causes, then simple regulatory changes to make stock buybacks illegal again, limit the kinds of executive compensation contracts that are valid, and incentivize higher dividend yields/penalize sales yields should return the market to the previous long-term-optimized behavior.
I doubt that you could convince the politicians and financiers who are currently pulling value out of a fragile and inefficient economy under the current system to make those changes, and if the changes were made I doubt they could last or be enforced given the massive incentives to revert to our broken system. I think you're right that it will take a huge disaster that the wealthy and powerful are unable to dodge and unable to blame on anything but their own actions, I just don't know what that event might look like.
So with AI, the way the natural conspiracy works out is like this. Leaders at the top might suspect it's bullshit, but don't care, they always fail upwards anyway. Middle management at non-tech companies suspect their jobs are in trouble on some timeline, so they want to "lead a modernization drive" to bring AI to places they know don't need it, even if it's a doomed effort that basically defrauds the company owners. Junior engineers see a tough job market, want to devalue experience to compete.. decide that only AI matters, everything that came before is the old way. Owners and investors hate expensive senior engineers who don't have to bow and scrape, think they have to much power, would love to put them in their place. Senior engineers who are employed and maybe the most clear-eyed about the actual capabilities of technology see the writing on the wall.. you have to make this work even if it's handed to you in a broken state, because literally everyone is gunning for you. Those who are unemployed are looking around like well.. this is apparently the game one must play. Investors will invest in any horrible doomed thing regardless of what it is because they all think they are smarter than other investors and will get out in just in time. Owners are typically too disconnected from whatever they own, they just want to exit/retire and already mostly in the position of listening to lieutenants.
At every level for every stakeholder, once things have momentum they don't need be a healthy/earnest/noble/rational endeavor any more than the advertising or attention economy did before it. Regardless of the ethics there or the current/future state of any specific tech.. it's a huge problem when being locally rational pulls us into a state that's globally irrational
We're headed for a crunch anyway. My observation is that a controlled demolition has been attempted several times over the past few years, but in every instance, someone has stepped up to cry about the disaster that would occur if incumbents weren't shored up. Of course, that just makes the next occurrence all the more dire.
Genuine question, I don't understand the economics of the stock market and as such I participate very little (probably to my detriment) I sort of figure the original theory went like this.
"We have an idea to run a for profit endeavor but do not have money to set it up. If you buy from us a portion of our future profit we will have the immediate funds to set up the business and you will get a payout for the indefinite future."
And the stock market is for third party buying and selling of these "shares of profit"
Under these conditions are not all stocks a sort of millstone of perpetual debt for the company and it would behoove them to remove that debt, that is, buyback the stock. Naively I assume this is a good thing.
The short answer is that the trend of frequent stock buybacks as discussed here is not being used to "eliminate debt" (restore private ownership), it's being used to puff up the stock price as a non-taxable alternative to dividend payouts (simply increasing the stock price by reducing supply does not realize any gains, while paying stockholders "interest" directly is subject to income tax). This games the metric of "stock price", which is used as a proxy for all sorts of things including executive performance and compensation.
The timeframe of expectations have just shifted, as everyone wants to experience everything. Just knowing the possibility of things that can happen already affects our desires. And since everyone has a limited time in life, we try to maximize our opportunities to experience as many things as possible.
It’s interesting to talk about this to older generation (like my parents in their 70s), because there wasn’t such a rush back then. I took my mom out to some cities around the world, and she mentioned how she really never even dreamed of a possibility of being in such places. On the other hand, when you grow in a world of technically unlimited possibilities, you have more dreams.
Sorry for rambling, but in my opinion, this somewhat affects economics of the new generation as well. Who cares of long term gains if there’s a chance of nobody experiencing the gain, might as well risk it for the short term one for a possibility of some reward.
You need to also have a robust alternative that grows quickly in the cleared space. In 2008 we got a correction that cleared the incumbents, but the ensuing decade of policy choices basically just allowed the thing to re-grow in a new form.
Yeah that's a more accurate framing, basically just saying that in '08 we put out the fire and rehabbed the old growth rather than seeding the fresh ground.
> Tesla and Bitcoin are ghosts of the timeline where those two sectors had to rebuild themselves from scratch
I disagree, I think they're artifacts of the rehab environment (the ZIRP policy sphere). I think in a world where we fully ate the loss of '08 and started in a new direction you might get Tesla, but definitely not TSLA, and the version we got is really (Tesla+TSLA) IMO. Bitcoin to me is even less of a break with the pre-08 world; blockchain is cool tech but Bitcoin looks very much "Financial Derivatives, Online". I think an honest correction to '08 would have been far more of a focus on "hard tech and value finance", rather than inventing new financial instruments even further distanced from the value-generation chain.
> Goldman Sachs and GM et al. should not currently exist.
Hard agree here
In our hypothetical alternate timeline, I imagine that there would have still been capital eager to fill the hole left by GM, and possibly Ford. Perhaps Tesla would have thrived in that vacuum, alongside the likes of Fisker, Mullen, and others, who instead faced incumbent headwinds that sunk their ventures.
Bitcoin, likewise, was warped by the survival of incumbents. IIUC, those interests influenced governance in the early 2010s, resulting in a fork of the project's original intent from a transactional medium that would scale as its use grew, to a store of value, as controlled by them as traditional currencies. In our hypothetical, traditional banks collapsed, and even survivors lost all trust. The trustless nature of Bitcoin, or some other cryptocurrency, maybe would have allowed it to supercede them. Deprived of both retail and institutional deposits, they simply did not have the capital to warp the crypto space as they did in the actual 2010s.
I call them "ghosts" because, yes, whatever they might have been, they're clearly now just further extensions of that pre-2008 world, enabled by the our post-2008 environment (including ZIRP).
I thought in 2008 we told the incumbents "you are the most important component of our economy. We will allow everybody to go down the drain but you. That's because you caused the problem, so you are the only ones to guide us out of it"
It’s obvious to me that all of OpenAIs announcements about partnerships and spending is gearing up for this. But I do wonder how Altman retains the momentum through to next year. What’s the next big thing? A rocket company?
Hmm, there were news about Sam Altman wanting to buy/invest on a rocket company. [0]
[0] https://www.wsj.com/tech/ai/sam-altman-has-explored-deal-to-...
I'm not hoping for a market correction personally, I'm hoping that mobs reinvent the guillotine
They deserve nothing less by now. If they get away with nothing worse than "a correction" then they have still made out like bandits
What would be the effect? Ironically, more productive?
I am pissed at Microsoft now because my family plan for Office365 is set to renew and they are tagging on a surcharge of $30 for AI services I don’t want. What assholes: that should be a voluntary add on.
EDIT: I tried to cancel my Office365 plan, and they let me switch to a non-AI plan for the old price. I don’t hate them anymore.