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A.I., A.I., captain!

Joseph Stiglitz, he of former World Bankiness, haver of the 2001 Nobel Prize in economics who warned that globalization was taking place at the behest international conglomerates rather than “forces,” now comes to light his hair on fire present similar cautions about Artificial Intelligence:

“Artificial intelligence and robotisation have the potential to increase the productivity of the economy and, in principle, that could make everybody better off,” he says. “But only if they are well managed.”
…
Beyond the impact of AI on work, Stiglitz sees more insidious forces at play. Armed with AI, tech firms can extract meaning from the data we hand over when we search, buy and message our friends. It is used ostensibly to deliver a more personalised service. That is one perspective. Another is that our data is used against us.

“These new tech giants are raising very deep issues about privacy and the ability to exploit ordinary people that were never present in earlier eras of monopoly power,” says Stiglitz. “Beforehand, you could raise the price. Now you can target particular individuals by exploiting their information.”

It is the potential for datasets to be combined that most worries Stiglitz. For example, retailers can now track customers via their smartphones as they move around stores and can gather data on what catches their eye and which displays they walk straight past.

The data farming of which we are all willing seeds know no boundaries, recognizes no politics and sees only profits. Shaded with the camouflage of complexity, it is a winning hand. Are we up for the ‘boring overwhelming’ of taking on the Tech giants? Wait, let me come in again…

Image: Warehouse operated by Amazon, via The Guardian

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A Financial Choice, Act II

In early September 2008, I drove down to Charleston to visit a cousin who had recently suffered a terrible accident. Throughout the drive I listened to extended public radio reports on an evolving calamity: the collapse of Lehman Brothers financial services firm. The horror that the government was going to allow such a large firm to go under was decorated with the baroque gadgetry of terms that would become more familiar in the coming years: credit default swaps, subprime mortgage lending, tranches, CDOs. The gore and detail of the cover that had been constructed around scams and fraud at the broadest level was audible in the voices of interviewers and guests. There was a tinge of disbelief within their attempts to explain what these terms meant and how they had gotten us all (!) into so much peril. It was as close to 1929 as we had come and potentially far worse – so extensively had the giant vampire squid of financial engineering welded its tentacles to every sector. Housing, banking, investing, construction, debt, bonds… this is business America now, and every other activity is vulnerable to its caprice. It was the stretch run of a presidential election as well; one candidate tried to suspend the campaign, the other fortunately tried to hold things together.

And he did mange to hold things together, despite rather obvious at the time challenges he personally faced. But the Lehman moment got everyone’s attention, everyone who mattered. $700 billion for Troubled Asset Relief (TARP), $250 billion for Capital Purchase(CPP), in addition to billions more in government-backed guarantees to individual banks. And eventually, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted. It seemed the public assistance required to save the vampire from itself had sealed the argument in favor of financial reform.

Yesterday, the Republican House of Representatives passed the Financial Choice Act and can you guess what it does? Right! Overturns Dodd-Frank. And not only is it a bad idea to weaken a law that requires stronger banks,

The bill also offers the wrong kind of relief. During the last crisis, all kinds of financial activity — including insurance, money-market funds and speculative trading at banks — depended on government support. That’s why Dodd-Frank placed limits on banks’ trading operations and provided added oversight for all systemically important institutions, and why regulators require them to have enough cash on hand to survive a panic.
Those provisions aren’t perfect — simpler and more effective options exist — but the Choice Act just scraps them. What’s more, it would eliminate the Office of Financial Research, created to give regulators the data they need to see what’s going on in markets and institutions. The law would leave regulators in the dark, and taxpayers implicitly or explicitly backing much of the financial sector.

If you didn’t click, that’s coming from fcking Bloomberg. The financial industry doesn’t even think it’s a good idea. In trying to undo more Obama-era legislation, the know-nothings in Congress are re-setting the table for our financial catastrophe guests. Sure, certain things could make Dodd-Frank unnecessary. But unfortunately, none of the thousands of people, firms, funds and frauds who populate this sector care about a stronger financial system or its being more competitive. It’s the logic of business – the democracy, whiskey, sexy of fools.
Image: Detail from The Garden of Earthly Delights, by Hieronymus Bosch, ca. 1500

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What’s the Alternative?

When you’re not very bright, and prone to dishonesty, I guess it’s only right that you would worry so much about being duped.

Who’s the sucker, right?

But this is what many people might have a hard time with, those who want to assume the best of intentions on the part of others and therefore hold out a benefit of the doubt for them like it’s the last baby carrot at the Appleby’s salad bar thing they assume is done for them. The question of honesty and intentions here is acute – for all the denial about the climate changing, what do it’s proponents suggest we do instead of trying to drastically reduce our reliance on carbon-based energy and hence, carbon emissions? Nothing? All of the scientists are lying so we can and should just keep on burning sh*t and kicking ass?

Al Gore went to Slate and refused to nibble delicately on the petit fours:

And again, we’re putting 90 million tons of it into the air today and we’ll put a little more of that up there tomorrow. The physical relationship between CO2 molecules and the atmosphere and the trapping of heat is as well-established as gravity, for God’s sakes. It’s not some mystery. One hundred and fifty years ago this year, John Tyndall discovered CO2traps heat, and that was the same year the first oil well was drilled in Pennsylvania. The oil industry has outpaced the building of a public consensus of the implications of climate science.

But the basic facts are incontrovertible. What do they think happens when we put 90 million tons up there every day? Is there some magic wand they can wave on it and presto!—physics is overturned and carbon dioxide doesn’t trap heat anymore? And when we see all these things happening on the Earth itself, what in the hell do they think is causing it? The scientists have long held that the evidence in their considered word is “unequivocal,” which has been endorsed by every national academy of science in every major country in the entire world.

If the people that believed the moon landing was staged on a movie lot had access to unlimited money from large carbon polluters or some other special interest who wanted to confuse people into thinking that the moon landing didn’t take place, I’m sure we’d have a robust debate about it right now.

Word. Gore quote via Benen.