5 ms·

It's part of a larger economic con centered on the financial industry and the financialization of American industry. If you want this stuff to stop, you have to

by h2zizzle 10mo ago

It's part of a larger economic con centered on the financial industry and the financialization of American industry. If you want this stuff to stop, you have to be hoping (or even working toward) a correction that wipes out the incumbents who absolutely are working to maintain the masqerade. 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.

hereme888 10mo ago
It's like when a child doesn't want something, you "give them a choice": would you like to put on your red or white shoes?
tech_ken 10mo ago
> correction that wipes out the incumbents who absolutely are working to maintain the masqerade 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.
- h2zizzle 10mo ago
  I thought we pretty explicitly bailed out most of the incumbents. A few were allowed to be sacrificed, but most of the risk wasn't realized, and instead rolled into new positions that diffused it across the economy. 2008's "correction" should have seen the end of most of our investment banks and auto manufacturers. Say what you want to about them (and I have no particular love for either), but Tesla and Bitcoin are ghosts of the timeline where those two sectors had to rebuild themselves from scratch. There should have been more, and Goldman Sachs and GM et al. should not currently exist.
  - tech_ken 10mo ago
    > A few were allowed to be sacrificed, but most of the risk wasn't realized, and instead rolled into new positions that diffused it across the economy. 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
    - h2zizzle 10mo ago
      I would say yes and no on Tesla. Entities that survived becaue of the rehab environment actually expected it to fail, and shorted it heavily. TSLA as it currently exists is a result of the short squeeze on the stock that ensued when it became clear that the company was likely to become profitable. Its current, ridiculous valuation isn't a product of its projected earnings, but recoil from those large shorts blowing up. 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).
- vjvjvjvjghv 10mo ago
  "In 2008 we got a correction that cleared the incumbents," 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"
mason_mpls 10mo ago
This assumes fair competition in the tech industry, which has evaporated without a path for return years ago.
jbs789 10mo ago
Looking forward to the OpenAI (and Anthropic) IPOs. It’s funny to me that this info is being “leaked” - they are sussing out the demand. If they wait too long, they won’t be able to pull off the caper (at these valuations). And we will get to see who has staying power. 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?
- the__alchemist 10mo ago
  Hell yes! Would love to short.
- cmiles8 10mo ago
  Increasing signs the ship has sailed on the IPO window for these folks but let’s see.
- piva00 10mo ago
  > 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-build-competitor-to-elon-musks-spacex-01574ff7 https://www.wsj.com/tech/ai/sam-altman-has-explored-deal-to-...
ranger207 10mo ago
How do you guarantee your accelerationism produces the right results after the collapse? If the same systems of regulation and power are still in place then it would produce the same result afterwards
pjmlp 10mo ago
Yeah, it started with the whole Wall Street, with all the depression and wars that it brought, and it hasn't stopped, at each cycle the curve has to go up, with exponential expectations of growth, until it explodes taking the world economy to the ground.
deleted 10mo ago
[deleted]
LeifCarrotson 10mo ago
Agreed! I recently listened to a podcast (video) from the "How Money Works" channel on this topic: "How Short Term Thinking Won" - https://youtu.be/qGwU2dOoHiY 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.
- baggachipz 10mo ago
  One need only look at 1929 to understand what's in store. Of course, the rich/powerful will say "who could have seen this coming?"
- robot-wrangler 10mo ago
  Stupidity, greed, and straight-up evil intentions do a bunch of the work, but ultimately short-term thinking wins because it's an attractor state. The influence of the wealthy/powerful is always outsized, but attractors and common-knowledge also create a natural conspiracy that doesn't exactly have a center. 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
theflyinghorse 10mo ago
Problem with "it will hurt" is that it will actually hurt middle class by completely wiping it out, and maybe slightly inconvenience the rich. More like annoy the rich, really.
bluefirebrand 10mo ago
> you have to be hoping (or even working toward) a correction that wipes out the incumbents who absolutely are working to maintain the masqerade. 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
- h2zizzle 10mo ago
  I tend to agree, but there's something to be said for a retribution focus taking time and energy away from problem-solving. When market turmoil hits, stand up facilities to guarantee food and healthcare access, institute a nationwide eviction moratorium, and then let what remains of the free market play out. Maybe we pursue justice by actually prosecuting corporate malfeasance this time. The opposite of 2008.
mark_l_watson 10mo ago
I have thought about stopping the use of all tech leaders: only use LLM access by running locally and Huggingface, only use a small 3rd party email provider, just use open source, and only social media use is via Mastodon. 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.

hereme888 10mo ago

It's like when a child doesn't want something, you "give them a choice": would you like to put on your red or white shoes?

tech_ken 10mo ago

> correction that wipes out the incumbents who absolutely are working to maintain the masqerade 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.

h2zizzle 10mo ago
I thought we pretty explicitly bailed out most of the incumbents. A few were allowed to be sacrificed, but most of the risk wasn't realized, and instead rolled into new positions that diffused it across the economy. 2008's "correction" should have seen the end of most of our investment banks and auto manufacturers. Say what you want to about them (and I have no particular love for either), but Tesla and Bitcoin are ghosts of the timeline where those two sectors had to rebuild themselves from scratch. There should have been more, and Goldman Sachs and GM et al. should not currently exist.
- tech_ken 10mo ago
  > A few were allowed to be sacrificed, but most of the risk wasn't realized, and instead rolled into new positions that diffused it across the economy. 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
  - h2zizzle 10mo ago
    I would say yes and no on Tesla. Entities that survived becaue of the rehab environment actually expected it to fail, and shorted it heavily. TSLA as it currently exists is a result of the short squeeze on the stock that ensued when it became clear that the company was likely to become profitable. Its current, ridiculous valuation isn't a product of its projected earnings, but recoil from those large shorts blowing up. 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).
vjvjvjvjghv 10mo ago
"In 2008 we got a correction that cleared the incumbents," 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"

mason_mpls 10mo ago

This assumes fair competition in the tech industry, which has evaporated without a path for return years ago.

jbs789 10mo ago

Looking forward to the OpenAI (and Anthropic) IPOs. It’s funny to me that this info is being “leaked” - they are sussing out the demand. If they wait too long, they won’t be able to pull off the caper (at these valuations). And we will get to see who has staying power. 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?

the__alchemist 10mo ago
Hell yes! Would love to short.
cmiles8 10mo ago
Increasing signs the ship has sailed on the IPO window for these folks but let’s see.
piva00 10mo ago
> 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-build-competitor-to-elon-musks-spacex-01574ff7 https://www.wsj.com/tech/ai/sam-altman-has-explored-deal-to-...

ranger207 10mo ago

How do you guarantee your accelerationism produces the right results after the collapse? If the same systems of regulation and power are still in place then it would produce the same result afterwards

pjmlp 10mo ago

Yeah, it started with the whole Wall Street, with all the depression and wars that it brought, and it hasn't stopped, at each cycle the curve has to go up, with exponential expectations of growth, until it explodes taking the world economy to the ground.

deleted 10mo ago

[deleted]

LeifCarrotson 10mo ago

Agreed! I recently listened to a podcast (video) from the "How Money Works" channel on this topic: "How Short Term Thinking Won" - https://youtu.be/qGwU2dOoHiY 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.

baggachipz 10mo ago
One need only look at 1929 to understand what's in store. Of course, the rich/powerful will say "who could have seen this coming?"
robot-wrangler 10mo ago
Stupidity, greed, and straight-up evil intentions do a bunch of the work, but ultimately short-term thinking wins because it's an attractor state. The influence of the wealthy/powerful is always outsized, but attractors and common-knowledge also create a natural conspiracy that doesn't exactly have a center. 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

theflyinghorse 10mo ago

Problem with "it will hurt" is that it will actually hurt middle class by completely wiping it out, and maybe slightly inconvenience the rich. More like annoy the rich, really.

bluefirebrand 10mo ago

> you have to be hoping (or even working toward) a correction that wipes out the incumbents who absolutely are working to maintain the masqerade. 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

h2zizzle 10mo ago
I tend to agree, but there's something to be said for a retribution focus taking time and energy away from problem-solving. When market turmoil hits, stand up facilities to guarantee food and healthcare access, institute a nationwide eviction moratorium, and then let what remains of the free market play out. Maybe we pursue justice by actually prosecuting corporate malfeasance this time. The opposite of 2008.

mark_l_watson 10mo ago

I have thought about stopping the use of all tech leaders: only use LLM access by running locally and Huggingface, only use a small 3rd party email provider, just use open source, and only social media use is via Mastodon. 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.