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Replace 'Tech' With 'Banks,' and We've Seen a Big Comeuppance Before (nytimes.com)
Nathaniel Popper, writing for The New York Times: When I moved to the Bay Area two years ago, it was with a sense of relief. Relief from New York winters and deteriorating subways, yes. But also relief after six years of covering Wall Street, an industry that had moved from one crisis to another after the financial crash of 2008, drawing the unending wrath of the public. In California I was joining a growing team of reporters covering Silicon Valley, which had quickly become the new engine of the economy. Just like Wall Street before it lost its luster, the tech industry had become the destination of choice for the top college graduates. I would be writing about a place where everyone was focused more on the future than on the past.
Now, just two years after getting here, and a decade after the start of the financial crisis, I have a creeping sense of deja vu as I go about my job. Admiration of the tech world has, in the wake of a growing list of scandals, quickly soured into an intense suspicion that manages to cross partisan lines, similar to what Wall Street faced after 2008 [Editor's note: the link may be paywalled]. As I have watched the recent parade of tech executives being grilled by Washington lawmakers from across the political spectrum, it has been eerily reminiscent of the combative hearings the big banks faced back in 2009 and 2010. As was true after the financial crisis, the backlash against tech rises out of a public awakening to the integral role that these huge companies occupy in our society -- with Facebook, Uber and Twitter playing the part that Goldman Sachs and JPMorgan Chase did a decade ago.
Now, just two years after getting here, and a decade after the start of the financial crisis, I have a creeping sense of deja vu as I go about my job. Admiration of the tech world has, in the wake of a growing list of scandals, quickly soured into an intense suspicion that manages to cross partisan lines, similar to what Wall Street faced after 2008 [Editor's note: the link may be paywalled]. As I have watched the recent parade of tech executives being grilled by Washington lawmakers from across the political spectrum, it has been eerily reminiscent of the combative hearings the big banks faced back in 2009 and 2010. As was true after the financial crisis, the backlash against tech rises out of a public awakening to the integral role that these huge companies occupy in our society -- with Facebook, Uber and Twitter playing the part that Goldman Sachs and JPMorgan Chase did a decade ago.
These are the people that build the hardware and write the code that the modern world runs on. And proceed to build it so full of backdoors and security holes that it at some point is likely to bring down a very large company if not country. Cutting corners and saving a few minutes all in pursuit of the almighty profit. Yup, nothing going on here.
The banks appear to have continued fucking everyone, so whatever their comeuppance was, it was not enough. Surely the response towards tech will be even weaker.
It's just the next ponzi scheme. Whether you are an investor or not, you HAVE to put the made up money that the government prints into these tech companies because there is no other retirement or savings scheme.
No matter what industry you are in, if you plan to save, it will lose value in a savings account so you are by default investing in the most-hyped thing from these huxsters.
The VC world subsidizes these schemes until they become so entrenched that the government can't allow them to fall - apple, FB, Alphabet/google or AMZ would tank the stock market if they ever went down at this point.
I've seen the enema, and the enema is me
The banks are still running everything. They got a bailout and they got to keep the properties on which they knowingly sold bad mortgages for which they got bailed out. We paid for those homes and didn't even get them. Tell me again about this "big backlash".
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Proost: I young wanker wastes a lot of time thinking about questions with no answers, then realizes life is for living and sets out to get drunk and laid.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Once a corporation gets big enough, it looses any soul it may have had. It's structural and systemic.
Tech is really boring these days. Back in the 90's when the net was taking off and interesting things were happening with computers (and a lot of tech companies still had some soul), one could at least naively believe in it. I did -- naively. I ran an Internet company -- I was "democratizing information" -- and thought I was doing social good.
It's all so about the money now even the naive can't believe it all.
This is an example of a false equivalence. The reason is that banking doesn't actually produce anything. Seriously, it doesn't make money, it just transfers money away from other people. Technology firms actually produce something, be it software or hardware, it's still something. Whatever that something is, it's going to keep being new as long as people have needs or desires. Sure, no one city lasts forever but it's a given.
Anons need not reply. Questions end with a question mark.
The solution to the banking crisis was regulation and control, which in today's age likely drives technical solutions (need an data archiving solution that can pull records in X amount of time? IT solution....). Breaking up big banks? Great, more entities that need new datacenters, more bandwidth, new IT staff, etc...
In the tech industry, regulation and control begets more technology and will drive demand and innovation for smarter, more integrated solutions. Facebook will look at "regulation" as a coding problem and work around what ever limits or control are put in place. GDPR? Great, hire more coders and treat it like any other problem faced in IT.
If Facebook, Google, Amazon are broken up I can only see this driving demand for newer more innovative platforms and may even drive growth.
No sig here...
if we held back new hardware and software until all possible security holes have been fixed we'd still be waiting for the first CPU and an OS to run on it.
I feel both of these apply:
Investigative reporters find bad things when they actually start investigating something...
News Reporters trying to make a name for themselves only report the bad things when they investigate something...
So in other words, we can expect a few years of increased scrutiny, and then everything will be back to business as usual for the tech companies.
Don't be so sure -- the rich NEED the markets to tank every decade or so to make more money.
Also, what's wrong with buying rental property in down times and renting to the tech workers? Services to tech workers are better investments than the tech firms themselves.
Just like many more people got rich selling shovels and food to gold miners than mining gold themselves.
Facebook is an advertising company.
Uber is a taxi service.
Twitter is an internet message board (ok, that's sort-of tech).
Google is an advertising company.
Actual tech companies aren't having the same troubles.
this stuff goes in cycles in many industries
get used to it, bail and get a job in different area on the downward side
The press is having an insane moral panic. Literally, someone writing for the Times just compared Facebook -- whose big crime is that if you were clicking on links to Farmville quizzes back in 2010, then advertisers got a copy of your friends list -- to bankers who intentionally acted in a way the led to thousands of job losses and foreclosures. These aren't even in the same UNIVERSE of wrongs.
It's simple: power corrupts. It's not just about which sector or organization type (gov't, non-profit, conglomerates, etc.) It's Human Nature 101. Checks and balances are needed on everything. It's a rare accident that an entity with power stays nice, and may not continue*. Any org who claims they can self regulate should be whipped with a wet noodle.
It's also the case that the Internet has a bigger influence on our lives. Start-up antics hurt only a handful, but missteps with widely used services can have societal consequences.
* I resisted a longer dig at Linus Torvalds about his growing grouchiness.
Table-ized A.I.
Executives have learned not to put any risky decision on paper. They simply verbally tell their top few minions "go do X". If something goes wrong, the executive can deny giving the order, or say it was interpreted wrong. It becomes 1 word against 2 or 3, which is often not enough to convict. It's hard to ask the boss to "put it in writing" without risking your career.
I don't know a practical way around such. If we legislate that all "big" decisions must be handed down in written (documented) form, then we must define "big decision" better.
Table-ized A.I.
Then there are people who build reliable, secure, and rugged devices, but you refuse to buy they because they're "expensive." Instead you buy the cheapest garbage you can find, then blame everyone else for the problems you encounter. Yup, nothing new here either.
Not that this wasn't entirely predictable.
The summary utterly failed to get to the point.
It was written by a professional journalist, so what did you expect?
So, I didn't read it. Would anyone care to summarize properly?
Summary: Journalist thinks journalism matters.
Zuck going before congress makes the front page of the NYTimes, but that has very little to do with what is going on in the tech world. Just because a herd of journalists are all chasing the same story, that doesn't mean the story is important.
Don't condemn journalism by the actions of just one twit. This article draws vastly incorrect parallels between the financial crisis and the tech industry. YES, the tech industry has its own huge and costly problems. But there aren't the same parallels, or even congruencies between the financial meltdown and tech.
This said, tech security is its worst problem. That the spooks in gov have manipulated it into Spy vs Spy is even more onerous. Add in lack of controls on data sets, and indeed something will explode, but its' not going to bring down the economy, IMHO.
---- Teach Peace. It's Cheaper Than War.
I've managed to go my entire life without ever once finding any need for Facebook, Twitter, or even Uber which at least provides an actually practical service unlike the first two.
Good fucking luck going through life without ever needing a mortgage though.
Banks control all of the actual productive capital of the world. So-called "tech companies" like those listed aren't even actually tech companies, they just make products that use technology. The first two are comparable to makers of fucking video games. They make distractions, pastimes, nothing of any practical value. Uber uses technology to play an intermediary role connecting people to something of practical value, namely transportation.
Actual tech companies are the people who build the computers and, even more importantly, the people who operate the networks between them. The people who should be facing inquiries into their practices are the goddamn ISPs and the like, not bullshit fucking Facebook who could vanish completely tomorrow and nothing of value would be lost.
-Forrest Cameranesi, Geek of all Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
No here is how it is the same...
1) Car kills people, "oh fuck it the driver is at fault" -> Tesla. If this were say Toyota where people were pushing the wrong pedal combined with a glitch, then well you would be taken to court and slammed. But because of the EULA there is a get out of jail card because you fucken signed up yourself.
2) I use social media and how my data is used and owned is not your business, it is their business. They can sell it and do whatever they please. Google fought for the longest time the right to be forgotten and then it is only in Europe this law.
3) If you store naked photos or yourself that were only for you or your significant other, and then it was leaked due to a glitch, well oops your fault, not the cloud company.
Tech is a core part of our society, and with the EULA they don't give a flying fuck what happens to us, it is just good business for them. If this were any other industry there would be real blow back, but not tech you know.
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
Thanks, the Republican Party appreciates your support.
Just send a check to V. Putin, Kremlin, Mother Russia.
You are assuming, or it seems as if you are assuming, that the backdoors aren't mandated by the governments that allow the companies to operate. I find that quite a questionable assumption. In certain cases we definitely know that this or that government demanded that this or that backdoor be present, and in some other cases there is reasonable circumstantial evidence. True, in most cases there is no evidence, but there's no evidence either way, so my default assumption is that it is similar to the cases where we do have evidence. Show me other evidence, and I'll change my mind.
Some examples where this doesn't seem to apply are Meltdown and Spectre. Meltdown clearly looks like Intel chasing illegitimate profits. Spectre is probably people thinking that "that exploit is surely not feasible", and unlikely to be greed (my estimate).
Now the management engine, etc. are probably to fulfill some government mandate. Probably a US government mandate, but they aren't the only suspects.
I think we've pushed this "anyone can grow up to be president" thing too far.
You mean like Gnome3 instead of Gnome2?
I think we've pushed this "anyone can grow up to be president" thing too far.
Maybe. But I won't do on-line banking, and I'm looking into getting a refillable credit card to use for online purchases instead of just avoiding them. So far they've all wanted to charge too much, so I just avoid online purchases, but as local stores go out of business that's becoming less practical.
I think we've pushed this "anyone can grow up to be president" thing too far.
"Admiration of the tech world has, in the wake of a growing list of scandals."
That's because people are desperate to be saved by non-humans. They want an app to change their world, not a person. They want a smartphone, not a philosophy. They would rather some form of modern technology revolutionize the simplification and security of their lives and possessions than accept that a comfortable life requires a lot of work. And they'll accept/believe a whole lot of BS just to ease their minds into believing that the great automated comfort is just a year or two away. It's mindless Futurism that's being fed by extreme political, economic, and social viewpoints constantly slinging mud at each other to the point where people would rather put a pox on both houses and leave the robots to rule.
And it's so blatantly mindless. From solar roadways/sidewalks, to supporting "disruptive technology" regardless of its harms, or putting a massive amount of faith in celebrity CEOs based on their futuristic sci-fi visions instead the real-world success of their work.
The author is right in that this happy blindness mirrors the run-up to the mortgage crisis because people *knew* that housing values could not go up forever and they knew that they would have to come crashing down because of BS investment methods. But they didn't want to miss out. They would rather blindly hope that the people who made and managed those financial instruments had somehow found the Holy Grail and everyone was going to get rich without having to work for it.
And then the lying game fell apart.
I always say that if economics, politics, or infrastructure is exciting enough to make the nightly news, something's broken. Those things should be boring. Interesting, but absolutely undramatic when they work well. And my god are people rabidly excited about social media, ride-hailing, dockless shared mobility, autonomous vehicles, and Tesla Motors specifically.
Yeah, instead the tech companies screw with our elections and let other people screw with our elections. Things are SOOO much better under our new leader, right? Just waiting for November. Republicans better get their shit together and help rid us of Trump otherwise there very well may be a blue wave, and it will be a whole lot worse then the Obama years.
If you thought those years were expensive, just wait until the "progressives" get behind the wheel. Those years will really get expensive. If you've done anything for yourself, you will see higher taxes, just as much government help you get presently (read none), and more expensive medical with less coverage.
The only good I can say has come out of the last two years really is a marginal tax cut. It was terrible for the national debt, but when has either party gave two shits about that? That's the only good thing about Republican leadership. I tend to get tax breaks which does help vs Democrats that increase my taxes and I see nothing for it because I work full time therefore get nothing in the way of services.
It's worth mentioning the banks largely didn't do anything illegal. They either had a lawyer verify all their decisions, or they bought new laws. They were able to stay exactly within the letter of the law, be unethical without crossing the line. You have to be foolish to break the law when you have those kinds of options. (Like Madoff).
"First they came for the slanderers and i said nothing."
If the comparison stands, it is bad news: 10 years after the subprime crisis, big finance has spared significant regulation hardening. Will silicon valley enjoy the same situation?
There are companies shipping products with zero security, because they think it impacts time to market. There are products that NEED security that don't have it. There are also products that advertise having good security that actually have substandard security.
That'd be Intel, AMD, Microsoft, and all the people/companies behind Linux. Android (Google)/iOS (Apple) don't run the world. Nor do Facebook or Twitter.
Well, the first list of companies I would call "tech" companies. The last group are not at all tech in anyw ay, they're social media. The middle group is half-and-half although they lean heavily towards merely being advertising companies.
It must be really depressing when you can't base your career on sucking billionaire cocks all day.
Good. People should be suspicious. They'll still be mostly ignorant of what they're suspicious of, but it's an improvement.
We don't hang people anymore. And doing your absolute best for the country regardless of competency is the furthest thing from treason. You have to prove intent to try someone for treason. The FBI proved that when they dismissed Hillary from wrong doing.
~ People that think they are better than anyone else for any reason are the cause of all the strife in the world.
Treason in your mind being what: not being Hillary? Not being the person you voted for? Not being a whiny participation trophy baby who can't wrap a tiny brain around the notion that a whole lot of people have different ideas about how things ought to work than you do?
You lost. You're going to keep on losing until you figure out why you lost. Your ideas don't work, trying to force people to think your way doesn't work, none of it works, so quit your tantrums and grow up.
Actually... If Facebook or Twitter were to fail, apart from employees and shareholders, very little parts of the economy would suffer. Marketing would have to reinvent itself and find new ways of reaching people, end of. WhatsApp could be replaced by almost anything else (is Viber still running?)
Google, Apple and Microsoft would be a bit different. We'd all lose our emails, support for our phones / computers / wearables etc. But that can be restructured/sold under Chapter 11 proceedings.
Amazon is "just" a bit marketplace. People would find a way to start selling stuff elsewhere!
TL;DR: Nobody in the tech industry is too big to fail. Let them.
So, the real problem here is some liberal arts major who was covering Wall Street, without understanding what was going on there is now covering Silicone Valley without really understanding what is going on there.
Isn't the the major problem with journalism in the U.S.? A bunch of people who don't have any real knowledge of what they are reporting on spouting nonsense? The reason the parallels are so bad is the writer doesn't know the difference between a tech company which supports vital technology infrastructure and a social media company that literally no one but the Ad agencies would even miss.
Users would think they miss it, but it would have literally no real effect on their life if Facebook or Google folded. Well at least not Google's ad business. As a supplier of Google Maps or Android there might be a problem. Facebook or Twitter? No effect on anybody's life. Even Trump would quickly move on to another platform, or no platform.
No.
The problem is with this journalist, not all of them. There are quite a number of cogent tech journalists. Simply speaking, this fellow isn't really qualified in either tech, or finance, IMHO.
Journalists have outed the bad business practices of many tech companies, but as most corporations are highly focused on returns to their stockholders, they're only vaguely concerned with ethical methodologies and concerns that they believe aren't theirs: security, privacy, ethical management of data, and more.
Because regulations are so lax, and those in place so laxly enforced, it's up to journalists to cause public sway, and journalists DO cause public sway, that contains the myriad shenanigans of the tech malfeasant.
---- Teach Peace. It's Cheaper Than War.
1) Car kills people, "oh fuck it the driver is at fault" -> Tesla. If this were say Toyota where people were pushing the wrong pedal combined with a glitch, then well you would be taken to court and slammed.
An independent investigation into Toyota's PCM code revealed that it was hot garbage— really, it was just gift-wrapped unintended behavior. Numerous execution paths were identified which could lead to unintended acceleration; and furthermore, Toyota's engineers were not only ignoring their own internal practices, but those practices were substantially and provably inferior to industry-standard practices.
I use social media and how my data is used and owned is not your business, it is their business. They can sell it and do whatever they please. Google fought for the longest time the right to be forgotten and then it is only in Europe this law.
That law is also garbage. Its entire purpose is to try to make people forget about bad things that other people did. It's willful rewriting of history in realtime.
If you store naked photos or yourself that were only for you or your significant other, and then it was leaked due to a glitch, well oops your fault, not the cloud company.
Tried suing for damages?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
vs Democrats that increase my taxes and I see nothing for it because I work full time therefore get nothing in the way of services.
Democrats reduce crime, Republicans increase the national deficit. What you see for it is that you get to keep what you make because it's not being stolen from you.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
So Starbucks and Dominos Pizza are tech companies?
A NYT's article? So, the ramblings of a 20 year old that doesn't know shit, basically. I doubt he even knows how to pronounce "San Tomas Expressway" correctly.
-==- Buy a Mac and leave me alone!
for small definitions of "largely". Parts of it were legal, just poorly thought out (and still in existence today). Likely being able to leverage something like 30$ for every 1$ you had on hand (or whatever it is now). It use to be less, but lobbied, and changed for the sake of market "liquidity".
What caused all the destruction was using the above, to knowingly buy derivatives of dirty mortgages, that everyone knew was bad, which were packaged by institutions that also knew they were bad, but everyone refused to believe the bubble would ever pop, and in the end they were to big to fail.
Which of course was enabled by the regulations that let banks also do all that silly sub-prime lending in the first place foisted upon people who should have known better, but were also believing that the bubble would never pop and that housing prices would forever increase.
The first in last were "legal" in that they were lobbied for by the banks, and regulation lessened to allow for it. The middle part, I'd say wasn't so legal. However I'm guessing difficult to prove, and at least on the parts of banks, plausible deniability based on the institutions providing the fake ratings. All a very circular complicit package if you ask me.
Even now, ask yourself, are housing prices so high because people have access to huge loans, or do people need to get huge loans because housing prices are so high. The reason is the loans. Well why the big loans? Because banks make all their money off debt, which interest rates low, they need to loan more to make the same amount of money... I mean it is a super complex question with a pretty simple answer really.
As to why interest rates are so low, well I'm not sure of the answer really. Were they artificially lowered by countries trying to promote growth in a previous recession enticing people to spend more with easy access to capitol? Then a deal done with banks later because the low rates were crippling the banks bottom line so regulation was lessened as a result? If so it has had some unintentional results, in that most of that money has ended up in an unsustainable housing market, with all the debt owned by banks, all teetering on the edge.