Opinion

Felix Salmon

When disruption meets regulation

Felix Salmon
Jan 30, 2014 15:37 UTC


Nick Dunbar has a fantastic post today headlined “Disruptive Business Models, Uber and Plane Crashes”, talking about how “the latest flurry of innovation” is being concentrated in regulated industries. Dunbar concentrates on non-financial companies: his examples are Uber, Airbnb, and a small company called Manx2, which was an airline in much the same way that Uber is a taxi service or Airbnb is a hotel company. Manx2 no longer exists, in the wake of a plane crash which killed two pilots and four passengers.

What Manx2 actually did was sell tickets. For each particular route, Manx2 then contracted with a plane operating company to fly the passengers…

The Spanish regulator that oversaw Flightline had no clue that the crew who had trained and been accredited in sunny Spanish climes were working remotely for Manx2, flying to fogbound Irish airports. And the passengers who bought tickets from Manx2, which the report says was ‘portraying itself as an airline’ had no clue about the risks they were taking by flying in such a plane run by a freelance operator. Reading the report, it’s hard not to get the impression that the virtual airline business model of Manx2 was partly to blame for what happened.

All regulated industries are inefficient: regulation cannot help but add a layer of bureaucracy to any organization, and no one ever hired a compliance officer as a way of boosting productivity. This creates a natural inclination, on the part of entrepreneurial types, to want to disrupt the industry in question. They look at it, they see all that inefficiency, and they know they can produce 90% of the output with 10% of the overhead.

The problem is that from a societal perspective, sometimes 90% — or even 99% — just isn’t good enough. Airlines are a good example: thanks to regulation, they’re incredibly safe. And when a company like Manx2 manages to slip through the regulatory cracks, the consequences can be disastrous.

The anti-Uber lobby is making similar claims about taxicabs: that they’re licensed for a reason, and that Uber’s attempt at doing an end-run around taxicab regulations is going to endanger passengers and other road users. When you get in a cab, you’re placing your life in someone else’s hands, and you really don’t want that person to be a violent criminal, or have a history of nasty traffic accidents. What’s more, the government is generally better at checking on such things than private companies are.

The main reason why local governments mistrust Uber, however, has nothing to do with public safety: it’s simply a fiscal matter. Both hotels and taxis are important revenue sources for municipalities, which is why city governments tend to be unenthusiastic about Airbnb and Uber.

From the point of view of Silicon Valley libertarians, the idea that they’re disrupting a long-established flow of public monies is a feature, not a bug. If you threaten their disruptive business models, you’re threatening their freedom! That’s the message being sent quite explicitly by the mild-mannered Fred Wilson; his west-coast counterparts, like Balaji Srinivasan and Peter Thiel, have a tendency to go even further.

In finance, regulation is very important indeed — if you want to prevent everything from terrorist finance to global financial meltdown, central authorities need to be able to keep tabs on all financial flows. Finance startups generally operate in a lightly-regulated grey area, just because compliance costs tend to be prohibitively high if you want to, say, start a bank. That explains why Simple isn’t a bank; why most microfinance shops don’t accept deposits; why Apple didn’t storm into the payments space years ago; why it’s so difficult for startups to compete with PayPal, which has spent many years and hundreds of millions of dollars on global compliance; and so on and so forth.

And so when states like New York and California try to gently embrace bitcoin, bringing it into the regulatory fold while not stifling it entirely, the result is always going to be a little bit messy. Bitcoin is built on libertarian mistrust of regulations; indeed, much of the enthusiasm surrounding it comes precisely because it is such a powerful and elegant means of circumventing government control.

I can see the argument for lighter regulation of microfinance institutions: if your depositors have just a few dollars in their accounts, you can’t be expected to spend $50 per customer per year on know-your-customer operations. But in the case of bitcoin, the scoundrels have the head start, and the regulators are never going to be able to catch them. As a result, the entire bitcoin edifice is probably going to end up being shut down by the Feds at some point. It might well get replaced by some other cryptocurrency, but in the case of bitcoin, the regulatory arbitrage is already far too advanced. Which means that if the bitcoin economy continues to grow, the world’s financial regulators will eventually have no choice but to kill it.

COMMENT

The manx2 example sounds like a far more basic failing if Dunbar actually knows what he is talking about – which he may not.

The notion of pilots being trained only to fly in certain geographies sounds dramatically off vs. FAA practice, which I thought was similar in other countries. If the pilot and equipment are only qualified for VFR – Visual Flight Rules – then they only fly in VFR conditions, which would mean without fog. Full stop. If pilot and equipment are IFR – Instrument Flight Rules – then they can land based on instruments, and fog shouldn’t matter. It would be very unusual – maybe impossible – for any sort of commercial passenger or large-scale charter to operate VFR in the U.S.

Posted by realist50 | Report as abusive

Digital media goes highbrow

Felix Salmon
Jan 27, 2014 23:35 UTC

‘Tis the season, it seems, for high-minded new media launches. Last week Arianna Huffington unveiled her new website, The World Post, in front of a group of well-fed plutocrats in Davos; this week it’s the turn of Ezra Klein to announce that he’s going to build a new news site under the Vox Media umbrella, and for Pierre Omidyar to release a video outlining his own journalistic ambitions.

In each of these cases, the principles of the sites are pretty much indistinguishable from the principals of the sites. Omidyar is by far the most ambitious: he wants to build a global news organization with multiple brands, deep pockets, fearless journalists, top-notch support services, and even its own technology company. You can see how he could get to $250 million pretty quickly, at that rate. That’s a lot of cash — but it’s still less than a single year’s journalism budget for Bloomberg, Reuters, or the BBC. Omidyar needs to make his money go a long way: he’s building not only an international virtual newsroom (with real physical newsrooms in more than one city) but also an elaborate technology, sales, and even legal infrastructure.

Klein’s venture, while ambitious, is not quite as ambitious as Omidyar’s. Rather than building his own infrastructure, he’s using Jim Bankoff’s, at Vox: that’s surely a good idea for anybody who doesn’t consider himself first and foremost to be a technologist. And rather than trying to be all things to all people, Klein is taking the thing that he’s best at — clear explanatory journalism — and simply extending it into new areas.

Most interestingly, Klein is ditching what he calls “the constraint of newness”. He has been talking about this for many years now, and he’s absolutely right: what most people want to know, when they’re reading about (say) the riots in Kiev, is not some incremental news article about what has changed in the past few hours. And yet that’s generally what they get. Here’s what he wrote back in 2010:

If I edited a major publication — or even a medium-size one — I would begin each major legislative battle by detailing a few of my smartest, clearest writers to create a hyperlinked, fairly comprehensive, summary of the basic legislation. That summary would be updated throughout the process, and it would be linked in every single story written on the topic. As reader questions came in, and points of confusion arose, it would be expanded, so by the end, you’d have a document that was current, comprehensive, navigable and responsive to the questions people actually had about the legislation. Telling people what just happened is undeniably important, but given that most people aren’t following that closely, we in the media need to do a better job of telling people what’s been happening.

Expand that vision beyond just legislation to news more generally, and I think you’ll have a pretty good idea of what Klein’s going to try to build at Vox. It’s an exciting move for Klein, who gets to try to reinvent the way that journalism is done on the internet, and it’s pretty much a no-brainer for Bankoff, who, like Omidyar, has calculated that it’s a lot more efficient to build than it is to buy. Vox Media will have 100% ownership of Klein’s operation, and also gets to turbocharge its growth by allowing Klein to use Vox’s proven technology. As a result, Bankoff’s return on investment could be very substantial indeed.

And then there’s the World Post, which is a joint venture of Huffington Post and something called the Berggruen Institute on Governance. BIG is the main project these days of Nicolas Berggruen, who’s almost a caricature of Davos Man: a billionaire financier, industrialist, philanthropist and all-round schmoozer with an unparalleled rolodex. Berggruen had a byline on the World Post’s lead story, the day the site was launched, and the tone is unmistakeable: “China,” he declares in his opening sentence, “looms larger than ever”. He then continues in this vein for another 2,400 words, concluding boldly:

The next ten years under Xi Jinping will be the ultimate test of whether China’s system of governance ends up on the wrong or right side of history. Either outcome will fundamentally affect the state of our world.

This is Davos bloviation masquerading as journalism, complete with boldface names:

Along with other members of the Berggruen Institute’s 21st Century Council, we had the opportunity to gain a firsthand glimpse into the mindset of China’s new leadership during a rare, wide-ranging discussion with Xi Jinping… We also met with Premier Li Keqiang as well as top generals of the People’s Liberation Army and other ranking officials from National People’s Congress as well as governors and Party secretaries from Zhejiang, Guangdong and Yunnan provinces.

There’s lots, lots more where that came from: similarly vapid articles have already been contributed to the World Post by a host of Davos types such as Bill Gates, Fernando Henrique Cardoso, Yo-Yo Ma, Elon Musk, Larry Summers, Richard Branson, Parag Khanna, and many others. Call it the International Brotherhood of Privilege.

The thing that makes Berggruen so very Davos is not just that he knows all these people, but rather that he only knows these people. If you live your life shuttling from private jet to Four Seasons suite, you end up in an echo chamber where everybody is urbane and friendly and comfortable, and where it seems crazy that big problems can’t get ironed out in a rational manner with the application of a little goodwill and a fair amount of high-minded talk.

That idea is the driving force behind Davos, and it’s also the driving force behind the World Post. If you weren’t invited to Davos, and want exposure to the kind of stuff that’s said on Davos panels, then you should definitely be reading lots of World Post articles. Similarly, if you’re Nicolas Berggruen, and you think that the kind of thing that’s said on Davos panels is incredibly important and deserving of wide distribution, then you’ll set up the World Post with Arianna Huffington, in the hope that a decent chunk of her 95 million global readers will find your stuff and read it.

From Huffington’s perspective, the whole thing is a win-win-win. She gets a bunch of new bigwigs blogging for her site; she gets an entree into Berggruen’s rarefied social circle (and also into his private jet); and she gets a substantial check every year from Berggruen, who will happily pay for HuffPo employees to man the phone banks, ready and willing to take dictation from any plutocrat who wants to share his opinion on the state of the world.

As a business model, the World Post is fascinating: it’s essentially low-priced native advertising for Berggruen. He’s subsidizing the site to the tune of about $850,000 per year; while I’m sure that’s very welcome income for the Huffington Post, it’s also a veritable bargain for a brand wanting to permanently sponsor an entire HuffPo vertical.

In any case, between these three sites, we have a pretty broad range of business models for those who would aspire to the Reithian project of informing the world about what’s important. Any one of them might be considered a random folly, but if all three are happening at once, then we might as well declare a trend. As David Carr says,

With high broadband penetration, the web has become a fully realized consumer medium where pages load in a flash and video plays without stuttering. With those pipes now built, we are in a time very similar to the early 1980s, when big cities were finally wired for cable. What followed was an explosion of new channels, many of which have become big businesses today.

It’s not unreasonable to think that at least some high-quality journalism will make its way into the list of the big digital-media businesses of the future. Certainly Pierre Omidyar and Jim Bankoff and Ezra Klein and Nicolas Berggruen and Arianna Huffington think that it will. It might take a while to get there. But the potential global audience is exploding, and for the first time it’s possible to imagine a digitally-native journalism venture being genuinely global. It’s an enticing dream — and it’s reasonable to expect that someone will get it right.

COMMENT

Re. Vox Media,
much to be said about neat archives.

Reuters does a nice job giving context – continued, comprehensive coverage must surely help [cudos intended].

Google News is not dead. I wish this project on them !

Posted by A-V | Report as abusive

Why the irrelevance of Davos is good news

Felix Salmon
Jan 27, 2014 09:17 UTC

No crisis can last forever, and the main lesson I’m taking from the 2014 World Economic Forum is that, at least as far as the world’s elite are concerned, we’ve finally put the financial crisis behind us. There are still a lot of things to worry about, of course, both political and economic. But this was by far the least economically interesting Economic Forum I’ve been to.

Now admittedly I’ve been coming to this conference during extremely interesting times. My first WEF was in 2008, when the credit crisis was top of mind; in all of the conferences since then, the unquestioned center of the proceedings has been the various conversations — formal and informal, public and private — between all the financial-sector bigwigs who attend. Finance ministers, central bank governors, bank CEOs — this was their conference, and it was important because they controlled the levers at the heart of all the world’s major economies.

Last year, I got a brief glimpse behind the curtain when I made it into an invitation-only discussion of monetary policy. The intellectual firepower in the room was absolutely astonishing: great central bankers of the past and present; Nobel laureates in economics; policymakers with decades of deep immersion in the issues at hand. The level of discussion was unremittingly high, and it was clear that everybody in the room was getting real value out of it.

This year, by contrast, economic issues were pretty much an afterthought. Sure, the central bankers and finance ministers all still turned up, and had the meetings they always have. But no one seemed to care. There was dutiful discussion of tapering, for instance, but it was clear that no one’s heart was really in it.

Similarly, while there has never been any shortage of heads of state at the WEF, and while there have even been quite a few foreign ministers in attendance, the reason for the big-name politicians’ presence has always been clear: they want the support of the international economic community. As a result, the job of any given president at Davos is pretty simple: give speeches, appear on panels, take bilateral meetings — and push a simple message at every opportunity. My country is open for business, we welcome investment, our civil society is strong, the opportunities are amazing.

This year, that changed. Two heads of state were in the spotlight — Shinzo Abe, of Japan, and Hassan Rouhani, of Iran. In both cases, the narrative diverged subtly from the economic focus so familiar to the Davos elite. Questions of Abenomics took a back seat to concerns about the new Japanese prime minister’s belligerence, and whether he might be moving towards a real conflict with China. And Iran, of course, is always a political issue first, with economic questions coming a distant second.

At the same time, there was a real urgency in Davos about two national disasters — Syria and Ukraine. Davos is endemically optimistic: its entire raison d’être is for leaders to come together with the purpose of making the world a better place. But this year provided the exception to the rule. Never have I seen a consensus in Davos, on any subject, as grimly pessimistic as I saw with respect to the probable course of both Syria and Ukraine. And so, for all that US foreign minister John Kerry was dashing around holding meetings and giving speeches, there was a real undertone of futility at Davos 2014.

After all, there’s no way that an annual four-day World Diplomatic Forum, held in some remote ski resort, could ever gain momentum. Davos, at its best, is a schmoozefest: it’s a place where CEOs from all over the world can get to know each other socially, and reassure each other that they think the same way and can do business together. For that kind of thing, a series of short meetings and well-lubricated “nightcaps” is perfect. But international diplomacy runs on a very different schedule, and in any case the big-name politicians are the one group which still gets to retain a cordon of aides, preventing the kind of serendipitous mingling at which Davos excels.

This year, as the Davos center of gravity shifted from the economic to the geopolitical, it seemed if anything less relevant and important than ever. Davos is fueled by talk, the more vapid and platitudinous the better. Such talk has real value, to the talkers: it’s a way of creating weak social bonds (which are actually more important than strong social bonds), and it helps to create the illusion that we’re all closer together than we are in reality. (One of my first Davos Moments, back in 2008, involved a 20-minute conversation in a shuttle bus with a very likable ayatollah.)

In the world of international diplomacy, on the other hand, the big personalities already know each other — or have made a tactical decision that they don’t want to. Talks can drag on for months or years, and positions are fought fiercely. There are no problems here that 20 minutes of meditation, or a boozy encounter at the Salesforce party, are likely to solve. As we learned in 2011, the institutionalized shallowness of Davos is incapable of providing any kind of constructive engagement on genuinely salient geopolitical issues.

The irrelevance of Davos is, arguably, good news: it’s a sign that the economic crisis is over, at least if you’re a member of the 0.01%. And the WEF was never designed to be any kind of replacement for the UN: it can’t be faulted for the intractability of the Syria crisis. In fact, Davos 2014 was in many ways the most honest WEF that I’ve been to. Business was conducted, friendships were cemented, and countless panels were convened on matters of Global Importance, mostly featuring men in suits who were a little bit vague about what exactly they were expected to contribute. Seen up close, there was a lot to learn; seen at a distance, it was basically a formless smudge.

Davos 2014, then, was all very fun and busy for the people who made it up the alp. But there was no reason whatsoever for anybody outside Davos to care what was going on. And that’s exactly how it should be. Don’t be fooled by the huge amount of media coverage the conference receives: most of it simply comprises the work of journalists trying to justify their junket. But this year more than ever, Davos was like any other conference: it had value only to the people who attended. Let’s hope (because none of us wants another global economic crisis) that it stays that way.

COMMENT

Did you post something on this? Where’s the link?

“Last year, I got a brief glimpse behind the curtain when I made it into an invitation-only discussion of monetary policy. … The level of discussion was unremittingly high, and it was clear that everybody in the room was getting real value out of it.”

Posted by dedalus | Report as abusive

Davos pusillanimity watch, LGBT rights edition

Felix Salmon
Jan 23, 2014 13:24 UTC

For an organization which loves to talk about the importance of social responsibility and civil society, it’s notable that the WEF has never had a panel on LGBT rights. This year, however, the issue has finally become impossible to avoid. Russia is in the midst of a poisonous campaign against its LGBT citizens; once the Winter Olympics are over, that crackdown is only going to get worse. And in Nigeria, where homosexuality has always been illegal and dangerous, president Goodluck Jonathan — who is here in Davos — recently signed into law a brutal new piece of legislation which makes even supporting gay rights punishable by ten years in prison; a round of arrests under the new law has already begun.

At the same time, the community of LGBT supporters is larger and more powerful than ever, and their message has finally made its way into Davos, if not into the formal WEF program. This morning, there was a classic Davos power breakfast under the title “The Global Fight for LGBT Equality”, which drew some very boldface names, including two US senators (Patrick Leahy and Claire McCaskill) as well as Navi Pillay, the UN high commissioner for human rights. The breakfast was sponsored by a broad cross-section of WEF partners: corporate support came from Credit Suisse, the Huffington Post, Microsoft, and Time Warner, while the main people making the breakfast happen were two big-name hedge-fund managers, Paul Singer and Dan Loeb.

The breakfast took place directly across the street from the forbidding concrete walls of the conference center, and one of the big questions was whether the clear sense of urgency and importance in the room would help the cause receive more official WEF recognition next year. As Miriam Elder says, the answer would seem to be no:

Event organizers said the World Economic Forum (WEF) in Davos had declined to host the LGBT event; the main gathering in Davos this year features guests like Nigerian President Goodluck Jonathan, who recently blessed the world’s most repressive law restricting LGBT rights.

“The organizers reached out to WEF but it quickly became clear that this program would not be regarded as ‘appropriate’ for the official Congress Center program,” a person familiar with the planning of the event told BuzzFeed.

It certainly doesn’t seem to be a simple oversight that the WEF has failed to address this issue so far. The sponsors of the breakfast, as well as other strategic partners like Goldman Sachs and (yes) Thomson Reuters, are very vocal about this issue, and there’s no shortage of WEF staff who are sympathetic to the cause. Panels on the issue have surely been proposed many times — which means that if we’ve never seen one, that’s because all such events have been systematically vetoed at a very high level.

The reason for such a veto is easy to surmise. Heads of state are at the top of the pecking order in Davos, and any LGBT panel would undoubtedly be very rude about individuals like Goodluck Jonathan and Vladimir Putin. The way the WEF works, if someone like Putin makes it clear that he doesn’t want any such panel to take place, then the panel won’t take place. Indeed, the WEF organizers, who constitutionally err on the side of overcaution, would probably veto any such panel just in case a powerful head of state might object.

Still, the issue is alive now, it’s not going away, and it’s causing serious problems for Davos regulars like Nigerian finance minister Ngozi Okonjo-Iweala. I’m a huge fan of Ngozi’s, but this is not her finest hour: every time that she’s asked about LGBT rights in Nigeria, she gives a what-can-we-do answer about how the law is very popular among Nigerians and how therefore the president had no choice but to sign it. As Fareed Zakaria noted in today’s event, that answer misses the difference between a tyranny-of-the-majority democracy, on the one hand, and a grown-up liberal democracy, on the other. Humans don’t lose their rights just because they’re in the minority, and it’s the job of any democratic leader to refuse to support the forces of intolerance and hate within his country. Besides, as Richard Branson said at the breakfast, you can get pretty much any result you like, in an opinion poll, depending on how you ask the question.

There is an enormous gap between what Okonjo-Iweala can and should be doing, on the one hand, and what she’s actually doing, on the other. Firstly, she should recognize that the issue of LGBT rights in Nigeria is a very important one, and work hard to be a voice of reason and tolerance within the Nigerian government. Far from threatening the WEF if it puts on a gay-rights panel, she should encourage it to do so, and she should even volunteer to participate.

Okonjo-Iweala should also embrace the argument that LGBT rights are an economic issue: that the current climate in Nigeria is so hateful that it will certainly have a negative effect on inward investment and the propensity of multinational companies to operate in the country. Instead, when she’s presented with that argument, she sneers at the westerners with their bleeding hearts, and says that if the west doesn’t want to do business with Nigeria, then the likes of China and India surely will. Investors from those countries, she says, would never let the issue of LGBT rights color their investment decisions. She’s sadly correct on that front, but in embracing the investors who don’t care about LGBT rights, she’s giving up a prime opportunity to place herself on the side of the angels.

Finally, and most importantly, Okonjo-Iweala should simply and clearly come out against the law. After all, she’s not an elected official: she doesn’t need to worry about being voted out of office. She’s happy to say that her own children have no beef with LGBT people, but she consistently stops short of personally saying that she believes in gay rights and LGBT equality.

The breakfast this morning featured a panel of LGBT activists from around the world: Alice Nkom from Cameroon, Masha Gessen from Russia, and Dane Lewis from Jamaica. There was no one from Nigeria, mainly because it’s considered too dangerous, now, for any Nigerian to align themselves in any way with the LGBT community. Ordinary Nigerians, even if they’re sympathetic with the LGBT cause, have good reason to keep their mouths shut; that’s exactly why it’s important for someone like Okonjo-Iweala to step up.

At the breakfast, Sweden’s minister for European Affairs, Birgitta Ohlsson, worried out loud that if westerners were too vocal when it came to preaching human rights. She was worried that such tactics might misfire in proud sovereign countries; she also said that it was “silent” pressure from the west which persuaded Uganda’s president, Yoweri Museveni, to refuse to sign a new anti-gay law in the country.

Ohlsson’s argument did not go down well with the panel: while behind-the-scenes pressure can indeed be effective, it is almost never weakened by outside public support. Still, it’s undoubtedly true that if there’s no domestic opposition to a bill, then it’s probably going to end up getting passed. As a result, powerful Nigerians like Okonjo-Iweala have a moral obligation to speak out.

In doing so, Okonjo-Iweala would certainly be on the right side of history. LGBT rights are not confined to countries like Sweden: Argentina, for instance, has the most progressive gender equality law in the world, while South Africa was the first country to enshrine LGBT rights in its constitution. Today, 60 countries ban discrimination against homosexuals; 16 countries have same-sex marriage; and many more have some formal mechanism to recognize same-sex partnerships or civil unions. Those numbers are only going to increase, but progress will not be linear: Nigeria is by far the biggest economy in the region, and there’s a lot of fear in countries like Cameroon that its anti-gay stance will prove contagious.

Tragically, Okonjo-Iweala has decided instead to simply fall in behind her president. Such pusillanimity is the norm in Davos; we can expect the global corporate sector to similarly ignore this issue. Many companies have a strong record of being gay-friendly in the US, but then turn around and extend no particular protections or benefits to their gay employees in less tolerant countries. Here’s one area where the WEF can be helpful: encourage global companies like Coca-Cola or Citigroup to make sure that all their gay employees are treated equally, including the ones in countries like Russia and Nigeria.

But that’s not going to happen as long as the WEF refuses to give this issue any kind of visibility. A single breakfast on the sidelines isn’t remotely enough. It’s long past time for the WEF to embrace a cause which, I’m pretty sure, is personally supported by a majority of the delegates in Davos. Here’s hoping it happens in 2015.

COMMENT

Most of the world is socially conservative, i.e., not on board with moral and sexual “modernism.” Giving homosexuals/tranvestites/transsexuals equal footing with heterosexuals is seen as a non-starter.

A number of countries do give them a place, but a place apart. That’s the deal, and it’s not likely to change.

Posted by Zeken | Report as abusive

Davos FOMO

Felix Salmon
Jan 22, 2014 00:11 UTC

Andrew Ross Sorkin is a very old Davos hand — he’s been coming for years, he knows the ropes, he knows what happens and what doesn’t. Which is why his column this week is so very odd.

Whatever their reasons for staying away, the leaders of some of the largest and most transformative companies are demonstrating, with their absence, the difficulty of convening a global conversation with all the main stakeholders…

At a time when globalization has so transformed business and economics, and at an event that bills itself as drawing the top stakeholders, it easy to understand why it is so difficult to make progress on the big issues when so many key people are not in the room.

This fundamentally misses what Davos is about. Sure, if you ask Klaus Schwab, the autocratic chief of the World Economic Forum, he’ll tell you that Davos is all about “convening a global conversation” and trying “to make progress on the big issues”. But I don’t think that even he believes his own rhetoric — after all, he never tires of complaining that the Forum is being commandeered by the big companies whose dues have made him extremely rich. It’s entirely possible that Sorkin is the only man in Davos who seems to genuinely believe that the purpose of Davos is to put Schwab’s ideals into practice.

The fact is that there is no global conversation; there is no “room”. (Or if there is a room, it’s the room which holds the IGWEL meeting, which is open only to public officials: the entire private sector is explicitly excluded.) If you’ve ever tried to throw a dinner party for more than ten people, you’ll know that it very soon becomes impossible for all those people to participate in the same conversation — everything fractures very quickly. A highly formal setting with a tough moderator might be able to double that number, but when you’re talking about an event with thousands of delegates, simply being in the same Alpine town as everybody else hardly means that you’re part of some grand conversation which is going to improve the state of the world.

For instance: the Pope made a minor splash, today, by sending a message to the Forum, in which he calls, among other things, for “deeper reflection on the causes of the economic crisis affecting the world these past few years”, which should in turn result in the assembled CEOs adopting a “precise responsibility towards others, particularly those who are most frail, weak and vulnerable”, along with “integral promotion of the poor which goes beyond a simple welfare mentality”. To which I can only say: yeah, good luck with that. While it might be self-evident to the Pope that the global financial crisis was caused by a failure to care about the weakest members of society, that’s not exactly a viewpoint which is going to be forcefully articulated at tomorrow’s panel on the “Global Financial Outlook”, wherein various bank CEOs will talk about “consequences of continued monetary expansion” and the “impact of regulatory shifts and harmonization”.

Of course, the panels themselves are pretty much a sideshow. The secret to Davos’s success is no secret at all: you invite a very carefully hand-picked group of people to travel thousands of miles to a small and remote Swiss town, and then ask them to stay there, generally, for a good four or five days. You remove them from their normal gatekeepers and power structures, and force them to mingle in a space which is too small to fit them all comfortably. The result is a series of more or less serendipitous meetings, and an opportunity for the global elite to get to know each other in a largely agenda-free context. That’s why so many journalists come to Davos every year: it’s not because anybody is committing news, but just because it’s a rare opportunity to talk off the record with extremely important people, and to get a bit of a feel for what they’re like, as people.

The conclusion one draws from such meetings will not come as any surprise: CEOs are pretty normal people, who have a pretty shallow understanding of most things in the news, and who can often be stupid and/or obscene, especially when drunk. Yes, they have money and power, but that doesn’t make them particularly insightful or admirable. Often, the exact opposite is the case.

Why do these CEOs come to Davos? It’s not to reflect painfully on their failure to live up to the Pope’s calling. Instead, Occam’s razor absolutely applies, here: the simplest explanation is absolutely the correct one. They come because they are invited; because they can get their companies to pay for it; because it’s generally considered a hot ticket that lots of people want; and because they get to rub shoulders with heads of state and global celebrities.

Which is not something anybody will say in public, of course. The official reasons for coming are much more serious: Jamie Dimon “one top bank chief executive” told Sorkin that “it would take me an entire year, and I don’t know how many flights, to see the number of people I can in three days at Davos.” That might even be true, or true-ish, for Dimon. But Dimon is the schmoozer-in-chief in a high-touch client-service business: one of the main ways in which he’s managed to stay on top at JP Morgan Chase is precisely his political ability, and the way in which he can charm just about any client in a CEO-on-CEO meeting. Most CEOs don’t have that job, and their meetings in Davos are therefore much less integral to what they do.

Davos is a town of insecurity: everybody worries that they’re missing out on something better than whatever it is they’re doing. But the ultimate missing out is not coming at all.

Are all these powerful CEOs so insecure that they worry about missing out on Davos if they don’t come? Yes, they really are. Once you get that coveted invite, it’s much harder to say no than it is to say yes. The true lesson of Davos is nothing about making the world a better place; it’s that even global plutocrats get stars in their eyes when presented with the opportunity to hang out with Bill Clinton, or when they get an invite to the Google party featuring Mary J Blige. Schwab shouldn’t bellyache so much about such parties: after all, panels on the global mining industry don’t make for much of a junket. The parties and the extra-curricular activities are the real reason that half the attendees even bother turning up in the first place.

COMMENT

Felix, ”

“But Dimon is the schmoozer-in-chief in a high-touch client-service business: one of the main ways in which he’s managed to stay on top at JP Morgan Chase is precisely his political ability, and the way in which he can charm just about any client in a CEO-on-CEO meeting” (snip)

I thought he ‘stayed on top at JP Morgan Chase’ the same way Dick Fuld did @ Lehman Bros: via his supine, submissive board of directors.

Posted by crocodilechuck | Report as abusive

How Tumblr and GitHub could be the future of education

Felix Salmon
Jan 21, 2014 09:24 UTC

I’m at DLD, in Munich, where on Monday I moderated an enjoyable discussion with Georg Petschnigg, the co-founder of FiftyThree, and David Karp, the founder of Tumblr. FiftyThree is the company which makes Paper, Apple’s iPad App of the Year in 2012, and also Pencil, the beautifully-weighted stylus which makes Paper even more of a pleasure to use. Tumblr is deeply embedded into Paper; it’s more or less the default way in which people using Paper share their creations.

Petschnigg and Karp get on just as well together as Paper and Tumblr, so this was never going to be one of those panels where the idea is to spark lively debate. Instead, we talked about a topic right in the DLD sweet spot: the intersection of technology and creativity.

It’s a topic I’d been thinking about anyway, in large part because I spent a few hours on the plane to Munich reading The Second Machine Age, the new book from MIT’s Erik Brynjolfsson. Brynjolfsson is a fan of the work of education researcher Sugata Mitra, whose research was featured heavily in Joshua Davis’s wonderful recent Wired cover story — the one which used the story of a single great teacher in the unprepossessing city of Matamoros, Mexico, to illustrate an important point about self-directed learning.

The lesson being taught by Mitra is not a new one: it dates back at least as far as Maria Montessori, whose Pedagogical Anthropology first came out more than a century ago. But Brynjolfsson, along with his co-author Andrew McAfee (himself the graduate of a Montessori school), makes the case that Montessori-style education, with an emphasis on creativity rather than rote learning, will be especially powerful and necessary in the coming decades.

Brynjolfsson cites work by the complexity scholar Brian Arthur and the economist Paul Romer, both of whom argue that the primary driver of economic growth is what Brynjolfsson likes to call “ideation”: the creative combination and recombination of ideas into something powerful and new. As Arthur puts it: “to invent something is to find it in what previously exists”.

Meanwhile, Petschnigg makes a compelling case that if you look at just about any creative industry — anywhere that ideation happens, from advertising to architecture — ideas generally germinate in exactly the same way: with creative individuals scribbling on a piece of paper. Petschnigg’s apps are, at their best, a way of turbocharging those scribbles — a way of allowing inspiration to flow, with the fewest possible bottlenecks, directly into the powerful networked computer known as an iPad. Then, when those ideas are shared on Tumblr, they can start mating with other ideas. This process, too, is almost effortless, thanks to Tumblr’s “reblog” button.

Don’t even bother trying to calculate the resulting increase in the number of potential combinations of ideas: it’s almost infinite. One of the reasons that Tumblr was valued at $1.1 billion when it was bought by Yahoo is that it naturally spawns millions of creative communities, most of which simply never existed before. The majority of the value created by those communities will not flow back to Yahoo, of course, but that’s fine: so long as Tumblr continues to be the foremost place where creative individuals congregate to share their ideas and creations, it will remain an extremely valuable property.

Tumblr does not appear in Brynjolfsson’s book; neither, more surprisingly, does its equivalent in the world of coders, GitHub. Yet there is undoubtedly trillions of dollars of potential economic value on GitHub right now, and every day coders unlock some of that value by combining its existing resources in innovative ways.

The power and value of combinatorial platforms can be seen elsewhere, too: just look at LinkedIn (market capitalization: $25 billion), which attempts to do for people what Tumblr does for creative output and what GitHub does for code. After all, companies like FiftyThree and Tumblr aren’t built by individuals working alone: they’re built by teams, working in a collaborative manner. Petschnigg teaches at NYU, and told me the story of one student he ended up hiring: not necessarily the most brilliant, but rather the one who could be counted on to be able to persuade just about anybody else in the class to join his team.

Brynjolfsson’s thesis, and I think he’s right about this, is that we’re only just beginning to glimpse the possibilities of a world powered by an unprecedented level degree of connectivity between people, ideas, and code. In such a world, educators will have to radically change the way they work. While schools once produced computers (the word originally referred to people, rather than machines), they will now have to produce creative individuals skilled in ideation, pattern recognition, and opportunistic team-building. Those things aren’t easily measured by standardized tests. But the children who are taught them are surely the ones who will build the future. One possible way to start: ask every child in the class to sign up for Tumblr and GitHub.

COMMENT

It always makes me laugh this idea that ‘the future is only about creative people’… the hive only needs one queen, a few consorts and a tonne of drones to make it run.

Quite a bit of automation is wasteful, but it’s cheaper because human labour is quite expensive. Looking forward what the world needs is FAR LESS waste and more people that actually know how to do things. I wonder how many people read this blog could do some work on their car, fix minor electrical or plumbing problems, hell even troubleshoot computer problems. People are helpless and dependent totally on functioning society for survival, and being wistfully creative as a rule is no way to live life or improve that state. People love to laugh at hardcore Libertarians (myself included on occasion) that would be happy living off the land completely off the grid… but one must admit at least they could do it and survive – me? not so much. And becoming utterly dependent on computer systems for absolutely everything is a step in the wrong direction, and that’s what I hear (read?) from this post.

Posted by CDN_Rebel | Report as abusive

Adventures in art-market commodification, enhanced hammer edition

Felix Salmon
Jan 17, 2014 18:46 UTC

Back in 2012, I wrote a post with the headline “How Larry Gagosian is like Goldman Sachs”. The general idea was that both of them use their relationships and their balance sheet to make money off and/or with their clients. Since then, as Christian Viveros-Fauné says, the art world has become even more coterminous with the art market:

“Business art” has arguably come to be the dominant form of art in our time. Today, this juggernaut of commodity-based art drives not only the way art is made, but also the way it’s promoted, marketed, sold, and, ultimately, understood both by experts and the vast public.

This explains why the NYT, when it recently decided to beef up its art-reporting team, turned to Graham Bowley, whose knowledge of art was rather slimmer than his knowledge of high-frequency trading. Bowley’s fresh eye on the market has proved illuminating: thanks to him, a lot of what used to be art-world rumor and gossip is now public knowledge. It was Bowley, for instance, who revealed that the official numbers coming out of China’s auction houses simply cannot be trusted: it is commonplace, in China, for the high bidder on an item to simply refuse to pay for it. And now, Bowley is naming names (and numbers) when it comes to the shadowy practice known as “enhanced hammer“.

Officially, if you consign an artwork to Christie’s, and it is hammered down for millions of dollars, then you owe the auction house a piece of the action — known as “seller’s commission”. In practice, however, the art world’s biggest rollers never pay seller’s commission. For big-ticket items, the auction house is entirely reliant, for its revenues, on the buyer’s premium — the difference between the hammer price and the actual price paid.

Increasingly, however, the hammer price has become completely meaningless. It used to give a pretty good indication of how much money the seller took home; no longer. Top clients, it turns out, aren’t just paying zero seller’s commission: they’re now paying a negative seller’s commission, and earning much if not all of buyer’s premium on top of the hammer price.

Bowley has persuaded art collector Peter Brant to go on the record about enhanced hammer. This was surely no mean feat, and it’s a big deal: it’s important that these practices come out into the open. In November, Brant sold a Jeff Koons sculpture for a hammer price of $52 million, towards the high end of Christies’ presale estimate of $33 million to $55 million. With buyer’s premium, the total amount paid for the shiny object was $58.4 million. (Don’t ask whether the presale estimate is a guide to hammer prices or to final price: the auction houses always try to have it both ways, encouraging bidders to treat the estimate as a guide to where they should bid, while then happily including the buyer’s premium when they say that the final price beat the estimate.) And of that $58.4 million, it turns out, Christies’ take was approximately zero.

I’d heard the rumor — but only a rumor — that Brant had negotiated an enhanced hammer of 112%: that Christies had promised him 112% of the hammer price. The reality is probably a little bit more complicated than that, since Bowley says there was a third-party guarantor. But Brant clearly told Bowley that he got to keep all of the buyer’s premium: Christie’s had the ability to make some money on the sale, but only if the sculpture sold for even more than the final $58.4 million price. Given the astonishing marketing push that Christie’s put behind the piece, it’s probably safe to say that the auction house ended up losing money on this particular work.

More invidiously, if Brant got to keep all of the buyer’s premium, then that opens up the possibility that he bought his own work — that the official sale price wasn’t a real sale price at all. The sculpture that Christie’s sold for Brant set a new record for Jeff Koons (and, indeed, for any living artist); it was sold aggressively to buyers around the world; and it elevated both Koons and Brant himself as art brands in the eyes of the market. If Brant was the high bidder, the total cost to him of selling the work would have been tiny, compared to the benefit he got in terms of personal reputation and the increased value of other works in his collection.

Now I’m not saying that Brant did buy his own piece. But it’s possible; and in general, the more common the practice of enhanced hammer, the more likely that such shenanigans are going on, and that US auction results might not be all that much more trustworthy than their Chinese counterparts.

Auction skeptics have been complaining for years that auction prices can’t really be trusted: that certain artists are being artificially bid up by small groups of dealers and collectors with large holdings of the artist in question, in an attempt to increase the value of their holdings as a whole. In a world where the buyer and seller between them pay commissions of as much as 25%, that’s a very expensive strategy. But in a world of 112% enhanced hammer, it’s almost a no-brainer. Even if Brant didn’t actually buy his own sculpture, there’s no way that Christie’s would know if he had a side deal of his own to rebate some of the ultimate sale price to the eventual buyer. After all, if they’re both big collectors, it’s in the interest of both buyer and seller for the piece to be seen to have sold for the maximum possible amount.

That said, the enhanced-hammer system was probably inevitable given the commodification of the art market. As the market becomes deeper and more liquid, it’s only natural that bid-offer spreads — the difference between what the buyer pays and what the seller receives — are going to narrow, and that we’re going to see more high-frequency trading in the art market. Even if that means commissions going down, it’s ultimately good news for Christie’s and Sotheby’s, which are essentially the art world equivalent of the NYSE and Nasdaq.

Both of the two big houses are moving aggressively into private dealing; Christie’s has a stated ambition to be larger even than Gagosian in that market. And while they don’t represent artists directly, yet, that too might change: indeed, some might say that it already has.

There’s a credible bull case for this strategy: as the art market becomes increasingly liquid, investors are willing to pay more for art: an asset class which used to be very hard to sell is now much easier to turn into cash. That makes it more valuable. Of course, there will still be volatility, but there’s a game afoot now. On Wall Street, it used to be called “pump and dump”: find a cheap stock, talk it up, sell it at a massive profit. That’s illegal, on the stock market. But in the art market, people put out press releases boasting of their prowess in such matters:

The Hort Family Collection, of which Peter Hort is a part, invested early in each of these artists. The Hort Family has a reputation for creating more value for works they collect.

In regular finance, if you have insider information about a stock, it is illegal to invest in that stock. In the art world, it is not only legal, it is done regularly. Peter Hort, along with his wife and family, are the people who create the insider information.

The trends in the art world are clear: newer money is gravitating towards newer art, which is considered a store of financial value and even possibly a source of significant profit. In order to make money in this world, connoisseurship doesn’t particularly help: what you need is “insider information” and the ability to hype certain artists to the type of collector who doesn’t know whether he’s buying a painting or a photograph. The only barrier to entry is money — which means that lots of rich people have decided to play. Most of them will end up losing, but all markets need losers, and — most importantly — all markets need a marketplace. If Christie’s can become that marketplace, then it will effectively have become the platform responsible for turning the informed appreciation of beauty into a greater-fool game where it doesn’t matter how much you pay, just so long as Christie’s can persuade someone else to pay even more in the future.

I hope it fails.

COMMENT

Felix, this isn’t the stock market, where institutional investors drive up prices and it’s the little guy left holding the bag. When the stock craters. This is a LUX market for rich guys — the money actually flows from the top down. You and CVF are worried about the Steve Cohens of the world … and that’s ludicrous.

Posted by MonteWoolley | Report as abusive

Why banks aren’t lending to homebuyers

Felix Salmon
Jan 15, 2014 16:53 UTC

“Despite the confluence of promising signs,” write Peter Eavis and Jessica Silver-Greenberg today, “little in the vast system that provides Americans with mortgages has returned to normal since the 2008 financial crisis, leaving a large swath of people virtually shut out of the market.”

This is absolutely true, and it’s a significant problem. To get a feel for just how sluggish the mortgage market is, my favorite chart comes from the Mortgage Bankers Association. Every month, the MBA releases its Mortgage Credit Availability Index, which makes it easy to concentrate on minuscule differences: in December, for instance, the index rose to 100.9, from 110.2 in November. But in order to see the big picture you need to zoom out and look at what credit availability was like before the financial crisis. And if you do that, the chart looks something like this:

Screen Shot 2014-01-15 at 11.49.43 AM.png

Of course, mortgage availability was way too lax in 2006-7, and the new index doesn’t have historical data going back before the end of 2010, so we can’t really see what was normal before things went crazy. But anecdotally, it’s much harder to get a mortgage now than it used to be. In the NYT article, the Center for American Progress’s Julia Gordon says that “a typical American family” with a credit score in the low 700s is “being left out”: that’s a very long way from subprime, which is what you’re considered to be when your credit score is below 620.

Meanwhile, here in Manhattan, no one in my condo building has been able to sell or refinance for the past couple of years, thanks to an ever-shifting series of rules at various different banks, all of which are clearly designed to just give them a reason to say no.

Why are banks so reluctant to lend? It’s not because of new rules about qualified mortgages, or anything regulatory at all, really. Instead, it’s much simpler:

fredgraph.png

To put it another way, would you lend money fixed for the next 30 years at a rate of less than 5%? Mortgage rates might still be well above the rates on mortgage bonds, but on an absolute basis, they’re still incredibly low. If you hold the loan to maturity, you’re never going to make very much money, and if you mark it to market, you run the risk of substantial losses if interest rates move back up to more historically-normal levels.

On top of that, the mortgage business is consolidating even more than the banking business more generally, with Wells Fargo being the big whale. It has the scale and the financial technology to manage all the risks and the regulations, as well as a big enough balance sheet that it can easily cope with being forced to repurchase loans it is currently selling. Most smaller banks have essentially zero competitive advantage over Wells, and it can make a lot of sense for them to get out of the game entirely, as Joe Garrett says:

One of the great myths of our industry is that a mortgage is the foundational product for consumer relationships. With many people having their mortgage payment automatically taken from their checking account, a significant number of borrowers don’t even know who their mortgage lender is. And mortgage borrowers are much more interested in getting the lowest rate than in getting a mortgage from their primary bank.

There are many commercial banks that do just fine not offering mortgages. Some offer it through a private-label mortgage company. Some refer borrowers to local mortgage bankers, and most simply don’t offer it. Mortgage banking does not generate deposits from customers, and to the extent that customer deposits are a major part of what makes a franchise valuable, mortgage banking does not help.

I cannot think of a single banker who was ever criticized for getting out of mortgage banking, but there are plenty who stayed in too long and lost their job and even lost their bank. Yes, mortgage banking can be very lucrative when times are good, but bank executives must know when to cut back, and they must also have the courage to simply exit this business when it no longer adds value to the bank and its franchise.

There are a few possible solutions to this problem, none of which are particularly hopeful. One is to simply wait for mortgage rates to rise back to say 6.5%, at which point a lot more lenders will start coming out of the woodwork. Another is to phase out the 30-year fixed-rate mortgage entirely, since it’s a product no private-sector financial institution would ever offer, were it not for the distorting influence of Fannie and Freddie. Both solutions would probably be accompanied by a decline in house prices, which no one wants right now. And then of course there’s the risk of overshoot — that if conditions loosen up, that will only serve to precipitate another bad-loan crisis.

Still, one thing is clear: for all that the Fed has been pumping billions of dollars into mortgage securities as part of its quantitative easing campaign, all that liquidity has failed to find its way to new homebuyers. I’m in general a believer in renting rather than buying, but the US is a nation of homeowners, and in such a country, a liquid housing market is a necessary precondition for economic vitality. Right now, we don’t have one — and we don’t have much hope of getting one in the foreseeable future, either.

COMMENT

“yours” – was directed to the lenders BTW, lol :)

Posted by Overcast451 | Report as abusive

Sensible data

Felix Salmon
Jan 14, 2014 20:40 UTC

I have an essay in the January issue of Wired about the limits of quantification. In the magazine it’s headlined “Why Quants Don’t Know Everything”, but online it’s been retitled “Why the Nate Silvers of the World Don’t Know Everything” — which is a little unfortunate, since the whole essay is deeply indebted to Silver’s book, which makes substantially the same point.

The initial idea behind the essay was the concept of priests vs quants — the seemingly eternal (but actually only quite recent) distinction between people who trust numbers, on the one hand, and, on the other, people who rely instead on their personal expertise and experience. Think of the difference between Billy Beane, using dispassionate analysis to outperform in baseball, and Bobby Fischer, whose gifts at chess seemed almost god-given. Nowadays, in a world of quasi-infinite data, it seems the quants are in the ascendant, while the priests are reduced to fighting a rearguard action, clinging desperately to some vestige of relevance. Today, if you want to change someone’s mind, you don’t appeal to authority: instead, you bring numbers.

The result is a deep societal disruption, in which quants take on priests and win: the Oakland A’s against the Yankees, the Obama team against Romney’s. It doesn’t take long before the war is won — we’ve all seen this particular movie before, especially the kind of people who sit on boards of directors. Thus does the priesthood wither away, taking with it a huge amount of valuable institutional knowledge.

The rise of the quants is, unsurprisingly, one of the driving forces behind Silicon Valley venture capital: if you start a small company which competes with a huge company, and the small company gets a few significant wins, then there’s almost no sum the bigger company won’t pay to acquire its smaller foe and use those skills against its competitors. The small company never needs to make money: all it needs to do is show disruptive potential, and it becomes enormously valuable.

But the data-rich narrative — the idea that science is taking over the world — has bred its own counter narrative for some 200 years now, ever since Mary Shelley published Frankenstein in 1818. People don’t like the idea that the computers are in control: for a prime example, look at the way Twitter exploded with privacy concerns as soon as it was announced yesterday that Google was buying Nest.

Or, just look at popular entertainment. The dweeby Q, in Skyfall, tells James Bond that “I can do more damage on my laptop sitting in my pajamas before my first cup of Earl Grey than you can do in a year in the field.” But Q isn’t the hero: Bond is. Similarly, it’s incredibly easy to paint Wall Street quants as the big villains in financial-crisis stories.

When the quants come into an industry and disrupt it, they often don’t know when to stop. They’re young, they’re arrogant, they’re rich and powerful – and they tend not to have decades of institutional knowledge about the field in which they have found themselves. They don’t work for the people who know such things, and they don’t listen to them, either. They’re winners, what do they have to learn from dinosaurs?

Put like that, the risks are obvious. Quants are just as blinkered, in their own way, as the priests they replace – even more so, in fact, since they can be quite Spock-like in their inability to understand the deep role that certain institutional functions are playing. Quants are great at coming up with clever ways of analyzing the world. But that doesn’t mean they’re great at managing institutions, or understanding how their employees might end up gaming the systems that they’ve created.

The solution to such problems is not to disdain the quants, as Bond does Q. Rather, it’s to synthesize the best of both worlds. Look at Southwest Airlines, for example: it has some of the most sophisticated operations geeks in the business, governing everything from fuel-price hedging to the most efficient way to board an airplane. But that doesn’t stop it having a much more human face than its larger competitors. Apple, too, is a prime example: quantitative to its toenails, it nevertheless is clearly governed by overarching principles of human-focused design. And why did Nest succeed where Google Power Meter didn’t? Just because it was designed in a way which made it desirable as a consumer product.

The secret ingredient, I think, is to ensure that managers have a deep understanding of the science being used in the organization — and also of its limitations. Great technology is all well and good, for instance, but if you want it to be broadly adopted, then you need a whole other set of packaging skills as well. And you can’t take technology further than its natural limits, either. It wasn’t really the Gaussian copula function which killed Wall Street, nor was it the quants who wielded it. Rather, it was the quants’ managers — the people whose limited understanding of copula functions and value-at-risk calculations allowed far too much risk to be pushed out into the tails. On Wall Street, just as in the rest of industry, a little bit of common sense can go a very long way.

COMMENT

You can’t discuss this question without talking about short-term vs. long-term thinking.

Most of the problems in the world today, including those related to quantification, can be traced to the glorification of short-term thinking at the expense of long-term thinking.

In essence….maximize profits and damn the consequences.

Posted by mfw13 | Report as abusive
  •