Pride of place is about as universal a value as I have come across.  People can make and take jokes about where they live or where they’re from, but when it comes down to it they see enough good that they will strongly defend the particular merits that make them love a place.  Part of it is cognitive dissonance, of course – if I was unable to articulate any good reason to live where I do, or agreed with an out-of-towner that the merits of their locale vastly outweighed my own, I would probably leave, so I must have found some reason (imagined or not) to justify spending part of my all-too-short existence here.

It was particularly jarring, then, for me to hear my father say he wasn’t sure if he would live in or around Philadelphia again if he had the choice to do it all over.  He was sufficiently fed up with the decades of impotence, waste, and incompetence that all the particular prides of this city had, in some ways, been washed away.  I asked myself if I could see myself in the same place, if the dynamics I’ve seen in my own 8 years in the city repeated themselves for decades more, and came to the sobering realization that the answer was yes.  I then thought about what could change to show the city is changing course, if there were issues our leaders could tackle to suggest they were serious about getting us back on track.

I immediately thought of DROP and the larger pension situation.

As such, this will be the first in what I hope to be a series of posts around understanding the pension picture in this city.  Doubtless it will take some detours along the way.  These aren’t new topics, and both DROP and the Philadelphia pension ecosystem have been written about with great style and insight by others.  What I hope to do here is zoom out to take in examples and context from other places in the country to see what is common or unique about our situation, as well as to try to find accountability and direction rather than write another article that simply summarizes a bad situation getting worse.

And so, our story begins…in….

Magical Rhode Island!

It would be easy to start with Stockton, Detroit, Orange County, or other bankruptcies bought about by mismanagement and economic malaise.  Or bring up everyone’s favorite bugaboo, *Illinois* (read in a spooky ghost voice).  But why not start with a success story?  

In 2011, the incoming State Treasurer of Rhode Island, Gina Raimondo, had made pension reform the centerpiece of her campaign.  Funding ratios were hovering around 50%, and the aforementioned Illinois was the only state whose outlook was comparably awful.  As with every other public pension I’ve come across, the unfunded liability was already understated due to outrageous (over 8%!) return expectations, but the usual suspects of low retirements ages, generous benefit awards, and politicians raiding the fund had contributed their bit.  Treasurer Raimondo, a first-time politician with a background in venture capital, released a report enumerating the difficulties, calling out key contributing factors, and laying out a path to address the problem.  The report was called Truth in Numbers and it’s worth a read: Truth in Numbers.

What would the report look like if we scratched out the numbers for Rhode Island and put in the numbers for Philadelphia?  I wonder…

In any case, Treasurer Raimondo’s message grabbed the attention of citizens and politicians, particularly after the city of Central Falls, which had opted to run its government employee pension program independently, declared bankruptcy, its pension plan out of money.  Galvanized, a reform plan passed through the state government and was signed by then-Governor Lincoln Chaffee in November 2011.  Its five major action items were:

1. Cost-of-living adjustments were suspended until funding ratios improved to 80%
2. Moving to a hybrid defined benefit/defined contribution plan, wherein state employees would be required to put 5% of their salary in a new, TIAA-CREF-managed defined contribution program, with the state adding a further 1% of salaries
3. Increasing the retirement age for full benefits to match Social Security thresholds
4. Extending out the amortization rate of liabilities to 25 years from 19 years
5. Establishing a commission to examine local (independent) municipal pensions to push for reforms there as well, such that the state would not be left holding the bag in the event of bankruptcies of other cities like Central Falls

Items 1 and 3 were the major drivers of cost savings, but it’s interesting to see where else the plan architects took action after a thorough examination of the topic and engaging with stakeholders on every side of the issue.

So here we are, some 7 years later.  Has it worked?  We see the headlines when states and municipalities reach points of crisis, but not so much as they work in incremental steps towards sustainable financial positions.  I hoped to find this would be an unalloyed success, but the reality is more mixed.

First of all, I was amazed to find how long and hard some parties fought the reform bill.  A critical underpinning to Rhode Island’s entire agenda is the fact that its pensions are governed by statute, rather than being contractual.  This means that the state government could simply change the law, whereas contractual agreements on pensions are covered by state constitutions and therefore impossible to adjust.  Attempting to find some legal ground to challenge this, however, union-related plaintiffs took the state to court.  In 2015, when the state and plaintiffs finally reached a settlement, the New York Times ran a Dealbook piece discussing the bumpy road to success, comparing Rhode Island to (you guessed it) Illinois and Chicago.  Even that wasn’t the end, however, and only in May of this year, almost 7 years after the reform bill was signed, did the state Supreme Court bring it all to an end by affirming the terms of the settlement.  

Legally, then, the dust has settled, so we can have confidence the reforms will stay in place.  So when we examine the 2017 financial report for the state pension plan (the latest available) we can have confidence that the funded ratio of around 53% is…

Wait, what?!  The funding ratio was 48% in 2010.  All the pain to get reform through and the funded ratio is only at 53%?  It’s not as bad as it looks, actually, but it should still make you sit up and take notice.  Remember my cheap shot above about unrealistic return expectations?  One of Raimondo’s first actions as Treasurer was to lower the expected return to 7.5% from 8.25% – still lofty, but progress.  At some point in the intervening period (I’m too lazy to determine exactly when, forgive me) the number came down again to 7.0%, so unfunded liabilities have (and I imagine will continue to have) a substantial tailwind in the form of falling return expectations.

What if we compare some of the line items from the Truth in Numbers report to see how the dire projections it foretold in the absence of pension reform fared?  One of my favorite contrasts was the point that around 10 cents of every taxpayer dollar was going to fund pensions when the report was written, but that it would rise to 20 cents by 2018.  Well, according to the state’s 2017 Comprehensive Annual Financial Report, it contributed around $246 million to its five pension funds that year.  The Rhode Island Department of Revenue reported $3.68 billion of revenue for the same period.  That’s 6.7% of taxpayer dollars going towards pension contributions.  I have trouble determining if this is an apples-to-apples comparison regarding the original Truth in Numbers calculation, but it’s a reference point.  (As an aside, it’s incredibly difficult to navigate and reconcile the varying budgets, revenue estimates, pensions reports, comprehensive annual reports, etc. to try and find clear, consistently defined data, but that’s a whole different topic.)  How about a plain and simple comparison of contributions to the pension funds vs. benefit payments.  In another case of the above, I can’t find the original source Truth in Numbers used to show the widening gap between contributions paid in and benefits paid out each fiscal year.  As such, I went straight to the source – the ERSRI annual reports, specifically Table 1 in the 2017 report, which provide the past 10 years of data.  Looking only at the state employees and teachers funds (which constitute the vast majority of assets) the gap has…not changed substantially, which I suppose could count as a victory given the fear of a difference that could have spiraled wildly out of control.  The lack of transparency here is frustrating, not in that data isn’t available, but that the oodles of disclosures and reporting, combined with the particular math of pension obligations, make it hard to seize on a single number that can be used to show progress.  My verdict – the pension reform was a win for sensible policy, and made gains for the state of Rhode Island, but not so much that they are clearly out of the woods.  Stories about firefighters in Central Falls who saw pension benefits fall 50% hide the real story about a state taking positive action to right-size things for future generations.  Only time will tell if it was enough.

Also worth noting, Treasurer Raimondo is now Governor Raimondo, running for re-election in 2018!  If nothing else, I was pleased to see a candidate who can work hard to sell difficult, technical issues to the public rise to higher office and (I hope) keep making a positive impact.

So why did I start with Rhode Island?  Not only because cutting straight to doom-and-gloom would be a serious downer, but because there are real similarities.  Demographically, Rhode Island’s population is 1.1 million compared to Philadelphia’s 1.5 million.  Both are older.  Economically, both are former industrial areas trying to come back with a service-focused economy, but have a heavy union presence in the public sector.  Politically, both are heavily Democratic.  

Difference abound, of course, and the elephant in the room is that much of Rhode Island’s ability to maneuver came from its pensions being governed by statute, whereas Pennsylvania’s constitution contains the aforementioned protection of contract obligations.  Philadelphia can impose reform on new employees, but benefits for those already employed are protected…unless they agree to give up some of those benefits, which is hard to imagine outside of municipal bankruptcy.  So already the city has one hand tied behind its back.  How did we get into this situation, anyway?  Probably a good topic for the next post in the series!

 

This is a pet topic, but one that remains strangely untouched, buried beneath the topsoil of Financial Journalism that blows with the day’s prevailing winds.

Remember the Super Committee? Eminence gris, a committee empowered to make the most brutal recommendations in easy memory for reducing federal debt. A wakeup moment, potentially, after the bankruptcy of Detroit and the climbing of public obligations even as the average citizen (or perhaps we should say the median) was right sizing things after a decade of leveraging up. Senators used to the delicate art of deferring to special interests spkke against their own most powerful interest group, the elderly. Alan Simpson’s treason against the AARP was the apotheosis – the gerontocracy narrowed its eyes and did what it does best. It waited. And the moment passed – recommendations were made, ignored, and the worries that spawned the Super Committee floated away on a (slightly) rising tide of economic growth.

But the problem is still here. I do not have a single numerate contemporary who believes there will be anything like Social Security three or (better for long term solvency) four decades from now, when we turn 70. I remember when I was first made to understand Social Security was an accounting gimmick, that the payroll tax revenue was not locked in a glorious vault in the Federal Reserve or Fort Knox, nor – less glamorously but still effective – a segregated account in a Treasury database. It is a pay as you go system. This was astonishing to me, and the math that came afterwards horrifying – more to come on that.

The fact remains that I cannot wrap my head around a federal defined benefit plan at a time when we see how important the swap to defined contribution must become. Otherwise we saddle our future comfort on the backs of the next generation. We have had societies in the past where a small group at the top of the pyramid lived in comfort based on the labor of much broader group or groups beneath. Those at the top justified their position by birth, blood, name, religion, caste, however you want to cut it. Not to say we have cast down every trace of these arrangements, but I think most rational people agree a society built on that foundation is unjust. And yet I think we have arrived at just such a society today – by accident not by explicit design – with the elderly at the top.

This isn’t a secret universal truth. The elderly are not, as a whole, living like kings. Poverty is real and serious, and the pyramid structure is an illusion as so many demographics and Financial Journalists have told us. But the fact remains that the system currently in place is fundamentally mismatched and not fit for purpose, and the underlying principles on which it is based will require heavier burdens on future Americans, burdens they never got to vote on but will be responsible for. The federal problem is well covered and a perennial discussion topic. I believe there will be reform, but only after a serious crisis that will leave some people to face dramatic changes in circumstances with little to no warning.

That brings us to Philadelphia…

Well hello!

Major personal developments, minor global developments – I’m not referring to the same events.

Today is Friday.  On Wednesday I shall quit my job at the world’s foremost financial services firm!  And you know what…it’s going to be great.  I worked hard to rise to the “top” of the industry, and I’m proud of myself for not just saying ‘this is enough’ and making the leap to something new.  I am incredibly excited about my new business and the people it will take me into contact with.

Meanwhile…GDP grew at 4.1% annualized QoQ!  Do you know what this means???? Well…ok not that much.  It will be revised and forgotten…but it’s also not sustainable!!  Huh?  That’s strange.  The host on CNBC invited the president of the Club for Growth, who is clearly an idiot, to discuss how the trillion dollar deficit would pay for itself through increased revenues.  The Club for Growth agreed, although they chastised the R-controlled Congress for it’s lack of discipline in cutting government spending, that ultimate evil.  Absurd.  Even if there was a theoretical leg left to stand upon, rank empiricism shows them to be wrong.  Disgusting.  The estimable Mark Zandi, paired on the segment with the Club, did his best to demonstrate this boost will be temporary at best, but he was drowned out by the morons seeking increased viewers by merit of a Large Number.  A thousand poxes on CNBC and all who work for it.

So I have a job more or less lined up, I’m off to try and engage with a woman.  Jesus do I need a girlfriend.

I’ve been neglecting my “duty” of late, late for an appointment I perhaps made without meaning to.  I’ve had plenty of things I want to write about, but lacked the discipline to actually do so.  A short one in the hopes that greases the wheel.

Amazon is upping its advertising given its increasing array of products – par for the course.  A new commercial has entered the mix for the Echo.  The Echo and Alexa are, for now, attached at the hip, and ne’er more shall we see ads for the (rather undifferentiated) speaker without its smart component, Alexa.  As an aside, a friend told me there is a whole team in Seattle devoted to giving ‘her’ a personality.  Seldom have I been so desperate to see the personality tests of a group of people as those on the personality team.

The ad begins with an unsubtle progressive inversion of a mother leaving her house, her child in the arms of its father (presumably, we might be so progressive that this is simply an enlightened man unrelated to the child) who looks enthusiastic but on edge.  The father fixes his gaze on his child and speaks.  The experts tell us that speech is incredibly important to a child’s mental development, particularly under the age of five.  Blessed are the parents who engage with their infants, rather than haul them around the streets with their own faces buried in smartphones.  And so, our enlightened chap looks fondly at the babe and speaks…to Alexa.

If memory serves, the man in fact does not speak to the child at all during the commercial, only to Alexa.  But more so, Alexa speaks to him.  To be fair, this is light material.  Rather than leaving a written instruction held to the fridge by a magnet (so 80s!) having Alexa speak about the baby’s teething tool at some pre-determined point in time is mundane, albeit more patronizing than pen and paper.  (And if the grizzled hero had asked Alexa, would she know?  If the house was rigged up like an Amazon Go store – undoubtedly on a whiteboard somewhere – she doubtless would.)  By the time we reach the end, however, we’ve crossed quite a bit of territory.  We started with the man asking Alexa to turn up the music, something pompous Mercedes drivers have been asking their cars to do since the turn of the century.  When father and child return from a playdate, caught in the rain, Alexa reminds the man that his wife/girlfriend/roommate loves him.  Alexa is an emotional surrogate.  He smiles.  Without his smart speaker, the underpinnings of their relationship would doubtless have melted in that rain like a chalk heart on the sidewalk.  Alexa saves the day, but really it’s you (you’re empowered!) acting through your trusted friend and smart speaker, the Echo.

This is, of course, absurd.  The staging is careful if unsubtle: the boosted music transitioning from diagetic to non-diagetic to demonstrate Alexa’s underlying influence throughout; Alexa reminding the father he is loved at just the moment his spirits are flagging after a day of child care; Alexa has even filled in the role of the fourth member of the nuclear family, helping to raise her younger sibling by telling papa the location of the teething toy!

It’s only fair we assume the teething toy was bought from Amazon.  This is downstream value – not only do they make money on the mediocre speaker, they get all the items and services you access through it.  In all seriousness, I imagine Amazon’s selection of teething items is unbelievable, and that the prices are highly competitive – with free shipping, probably unbeatable for all but the most refined toddler gums.  The retail side of Amazon simply returns us to their home base of an incredible fulfillment machine spun up to light speed on the miraculous negative operating cycle.

But what about the other side of the interactions here?  Does Amazon use everything or anything it hears?  To do what, to target ads for this family?  To build new services, essentially gaining free information it might otherwise have had to test the market for, information which you might not – on full consideration – have parted with so easily?  Ignoring the fact that Alexa’s buffer stores information and seems to frequently activate unintentionally, almost certainly.  When mom sets the reminder about the toy in the freezer, does Amazon take note of that specific request?  What about the reminder of feelings?  Will our lucky twosome see sponsored ads for baby-related products or romantic gifts on Amazon?  Could that information pass to third parties, who could mail me (electronically or physically) ads of their own?  Keep in mind Amazon, like most large companies, updated their terms of service only a few months agree to comply with the EU’s new General Data Protection Regulation.  Presumably they favor the customer more than they have done in recent years.  We read:

Amazon processes and retains your Alexa Interactions, such as your voice inputs, music playlists, and your Alexa to-do and shopping lists, in the cloud to provide, personalize, and improve our services.

So yes.  Mom’s recording is analyzed by Amazon to ‘personalize’ her shopping experience.  Keep in mind a majority of Americans dislike targeted advertising.  Speaking of which:

On both Amazon-owned and operated sites and unaffiliated sites, Amazon displays interest-based advertising using information you make available to us when you interact with our sites, content, or services. Interest-based ads, also sometimes referred to as personalized or targeted ads, are displayed to you based on information from activities such as purchasing on our sites, visiting sites that contain Amazon content or ads, interacting with Amazon tools, or using our payment services.

Why hello!  Amazon is not Google or Facebook, surveillance capitalism isn’t their primary game…but they step into it quite nicely:

We do not provide any personal information to advertisers or to third party sites that display our interest-based ads. However, advertisers and other third-parties (including the ad networks, ad-serving companies, and other service providers they may use) may assume that users who interact with or click on a personalized ad or content are part of the group that the ad or content is directed towards (for example, users in the Pacific Northwest who bought or browsed for classical music). Also, some third-parties may provide us information about you (such as the sites where you have been shown ads or demographic information) from offline and online sources that we may use to provide you more relevant and useful advertising.

No doubt mother and father will appreciate the exposure to the teething toy ads and anniversary rings from Amazon jewelry, safe in the knowledge they are known only as new parents in the need of tools of the parenting trade and a good date who live in the metro Seattle area (the rain clued me in).

In any case, I thought the commercial was creepy in that it tied us back into the big issues we already know about large technology companies, but the strange intermediation or intercession of Alexa as a communication device between people bothers me.  It’s a small step, I admit.  Voice control already lets us dictate messages on our phones to email or text to people, so what’s the difference if Alexa is relaying these messages for us at a specific time?  Maybe none.  But at some point, I think we should be okay with leaving the volume down and talking to the baby, or maybe picking up the phone and telling someone we love them ourselves.

A lovely piece in the New York Review of Books, “The Digital Poorhouse” (from the June 7, 2018 issue) ostensibly reviews two texts on the negative externalities of digital tools, but in fact offers a remarkable overview of what we find in the shadows cast of today’s digital giants.  From unintended results to implicit bias, the author cites a wide variety of social, economic, and cultural impacts these tools have had.  Noting that companies like Google and Facebook often have to override the natural outcomes of their primary products, his point that there is a tacit admission of moral failure is one that is easy to remember when we see Mark Zuckerberg facing a Congressional committee, but that slips away in our half-distracted daily use of these tools.  I have yet to come across a case for or against the idea of users of a service being ‘complicit’ in driving these moral failings, nor devoted any time to it myself, but as feedback loops and ‘clicks’ drive the evolution of these tools, it seems like an issue worth examining.  Given its function as a review rather than a thrust for a single thesis, the piece has no specific conclusion, but I like its dueling explanations around ‘garbage in garbage out’ as well as the importance of a regulatory framework that can address problems (Europe) as opposed to one that offers useless transparency.

Spurred on by extreme consumption of BBC detective dramas, I was examining the geography of Yorkshire when I realized it was much larger and much greener than I thought.  So green, in fact, I was taken aback.  Four what appear to be national parks or their near equivalent are contiguous – the Forest of Bowland, Yorkshire Dales National Park, the Lake District, and the North Pennines Area of Outstanding National Beauty – take up an enormous part of not just Yorkshire, but in fact of England.  Looking at the roughly clover-shaped splotch of green on Google Maps, I felt I needed to better understand the scale of what I was looking at.  It being a vacation day, I wasted far too much time on in…

The total size of the four areas in question is 2,835 (or so) square miles – for comparison, Yellowstone National Park is about 3,500 square miles, while Yosemite is around 1,200 square miles.  But what else could I do to make a like-to-like comparison, given the two American parks I cite are in a country that is so much bigger than the UK?  Well, the total area of England, Scotland, and Wales is 89,225 square miles – I exclude Northern Ireland as it’s a different body of land.  So the four parks in Yorkshire are 3.2% of the total land area of those three nations.  Their total population is 61 million.

Using different states in the northeastern United States (the most densely populated part) I cobbled together an area of roughly the same population.  Vermont, New Hampshire, New York, Massachusetts, Connecticut, Rhode Island, Pennsylvania, New Jersey, Delaware, and Maryland together have a population of 62 million, and an area of 160,000 square miles.  The New World – even the oldest, densest parts just have more space than the Old World!  3.2% of 160,000 square miles gives us an area of 5,100 square miles.  That’s a park the size of Death Valley (the largest national park in the contiguous United States) planted square in the middle of the the Northeast!  Using the highly scientific method of holding my thumb over my computer screen for reference, that’s a green area stretching from New York City to Wilmington, Delaware, and wide enough to encompass Philadelphia and Allentown.

So nice job, Yorkshiremen and Brits writ large!  Having such a singular swath of green across such a densely populated country is a worthy achievement, and I for one have added it to my list of future adventures.

Christopher Hitchens quoting Gore Vidal – segue much?

From the London Review of Books, January 2000, covering the American presidential election of that year.

“It was in San Diego, California in the late summer of 1996 that the working hacks finally tumbled to what they had done. A Republican National Convention had been arranged, as a sort of sound-stage or a mixed-media event, entirely for the convenience of the press and TV. The delegates were mere extras on the set, the coronation of the two nominees was a sure thing, the feral extremists and fundamentalists had been tidied out of sight, the corporate-sponsorship logos were beautifully placed, the camera angles and background briefings were the chief preoccupation of the Party managers and – there was exactly nothing to cover, nothing to transmit, and nothing to write about. A day or so passed, in this city of sinister charm (once described by Gore Vidal as ‘the Vatican of the John Birch Society’), in an agony of boredom and irrelevance.”

Eat that, San Diego.

And now a Hitchens original from the same article, writing about abortive candidates for President:

“While the other peripheral or marginal candidates have all received much more attention than they could normally expect, simply because of their supposedly ‘human’ qualities. Donald Trump – a ludicrous figure, but at least he’s lived it up a bit in the real world and at least he’s worked out how to cover 90 per cent of his skull with 30 per cent of his hair. Warren Beatty – a beaming former Adonis who has significantly narrowed the gender gap and who has a literal belief in the New Deal. Bill Bradley – boring and pompous and tenth-rate but used to play basketball and take showers with African Americans. John McCain – nobody’s idea of an intellectual but likes to talk dirty and got himself shot down while scattering high explosives over someone else’s country.”

The juxtaposition of this early scorn for our now-leader with his spot-on 90 percent/30 percent description…yes.

A deep and sustained effort to avoid work this afternoon led me to a wonderful archival post of Gore Vidal’s 1974 review of The Power Broker in the NY Review of Books.  The opening line is devastating on at least three levels, so much so that it’s inspired me to start a running series searching for similar material.

“For thirty or forty years I have seen the name Robert Moses on the front pages of newspapers or attached to articles in that graveyard of American prose the Sunday New York Times Magazine section.”

But really, the book apparently won a Pulitzer Prize, and the review is wonderfully written even if the bite of Gore’s offhand scornful asides begins to fade after the fourth or fifth time.

This is one I periodically ask myself.  To quote Hilary Mantel (I think?) talking about something else entirely, social media and its knock-on effects seem “more discussed than understood” these days and accordingly I try not to engage too strongly with throwaway descriptions on the subject.  Nonetheless, I sometimes come across pieces that seem to touch on the essence, so I’m going to start collecting them here.  Full disclosure, I hope to write my own piece on this at some point, most likely from a critical angle, but I’ll try to keep an open mind!

4/16/18 – Alex Clark, The Times Literary Supplement, “The Best British and Irish Novelists Today” (4/6/18)

“Box sets, streaming, all-episodes-available; attention spans smashed by social media; the rise of narcissism in the face of a culture obsessed with the perfectibility of daily life via a constantly rotating slew of life hacks and photographed lunches. Content.”

This one nailed it for me because even as someone who doesn’t use social media, I feel this daily.  I hate binge-watching TV shows, but I do it.  I hate refreshing my favorite website multiple times a day when I’m a believer in long-form pieces, deep analysis, and the reflection that both call for, but I do it.  Life hacks and food photography might be among the most asinine things in the world.  And the escalation to that last word: content.  One word that summarizes an ever-growing world behind our screens, one that consists mostly of non-information and trash, but we are still willing to binge through it, keep hitting refresh, swipe away from the obviously awful, in search of that next little hit of something good enough to keep our attention.

The whole article is worth checking out, by the way – beautifully composed, and most likely chock full of authors you didn’t know about who you’ll be eager to pick up.

5/9/18 – Jennifer Cobbe, New York Review of Books Daily, “Reining In Big Data’s Robber Barons” (4/12/18)

“These days, virtually every aspect of day-to-day life is fed into corporate databases and used to predict and influence all kinds of behavior. Surveillance corporations don’t just respond to consumer wants; they also shape and drive those wants toward their own ends. Usually, that means a click on an advertisement, a visit to a website, or, ultimately, a purchase. To do this, they attempt to take advantage of known shortcuts and biases in human decision-making, called “heuristics.” Often, this means presenting links and other content in such a way as to generate interest, but sometimes, as in the case of so-called “dark patterns”—misselling techniques and tricks to game attention or gain private data—it involves a choice architecture that is patently deceptive.”

Cobbe’s is perhaps the best piece I’ve yet read to succinctly describe the fundamental conflict within the business models of companies like Facebook and Google.  More to the point, she backs her argument with copious research and empirical findings rather than sticking simply with a moral stance.  I at once fell in with her use of the term ‘surveillance capitalism’ (which she acknowledges taking from HBS professor Shoshana Zuboff) to describe the system behind these companies.  Her follow-on points about behavior modification struck a chord with me as well, given that professional investors are similarly motivated to profit from behavior biases rather than acting to correct them.  Particularly valuable, I thought, was her effort to separate data from privacy.  Merely gathering my data is distinct from violating my privacy by using that data in an ongoing attempt to influence me – not an average approximation of ‘me’ across a large data set in a contextual circumstance, but me!  As Cobbe mentions, computers are – given the right data – now better than your close friends and family at accurately describing your psychological profile.  That these companies are using my data to build a profile of me in order to manipulate me on behalf of advertisers would almost be flattering (me? of all the billions of citizens?) if it wasn’t so scary.  In my mind it’s also a violation of the spirit in which these companies so often claim to act.  All of a sudden, “don’t be evil” seems like a remarkably low standard for a corporate motto.

I tend to believe that if we focus too much on the second-by-second zeitgeist of the news cycle, we can sometimes miss the forest for the trees.  David Webb, whose excellent “Webb-site” has become part of my routine, writes for a Hong Kong-based audience, but I think his international focus might help Americans see through the blind spot in their local coverage.  In his post “Facebook, Big Brother and China” he reminds us that Facebook users – and users of all the other free internet Goliaths – are themselves the product.  Your time and data monetised, and your digital presence rendered into essential but somehow superficial characteristics; a reductive funhouse mirror that reflects the unwavering gaze of advertisers and data scientists.

I was recently contacted by a friend who works at Amazon, another titan of data gathering and analysis.  She told me that a favorite Amazon Video show of mine (for which she has given me grief in the past, not being a fan herself) had recently been closely studied by their data scientists to determine the average viewer profile.  She shared an age range and sex of the average viewer – both of which were correct, as applied to me.  As far as those two pieces of information go, I don’t have a problem with being assigned a group.  My rule of thumb is that if a private company, via the internet, is trying to categorize me in the same way a government census worker might, I’m alright with that, even if the means is somewhat shadowy.  Next she said that viewers of this show “liked to try new restaurants.”  Age/sex/location…cuisine?  Definitely not a census worker question.  Also, are there people who don’t like to try new restaurants, who have been going to the same three or four places forever?  Viewers of this show also like “reading.”  The juxtaposition of these two things made me narrow my eyes – the portrait painted of someone who reads and likes to try new restaurants is, to me, a boring, house-bound mouth-breather for whom trying a new restaurant is the height of adventure and quite the thrill.  After a meal at their exciting new spot, the reader speedwalks home (careful to check the crosswalks along the way, of course) in order to plop down for some alone time with that lovely book he or she has been working on.  I could tell from my friend’s reaction  (to quote directly, “hahahahahaha”) this was just the image she got as well.  The icing on the cake was that, per Amazon, the bookish unisex gourmands who watch this show are “ordinary and to be found in every neighborhood.”

Now, I understand there’s not much point in taking this personally.  No one wants to be told they’re pretty average and people like them abound even though, by definition, this has to be true for most people regarding most things!  The leveling influence of the internet means it’s harder to be one of the literati who consumes only the most avant-garde, off-beat, unique media.  Does Amazon have shows for which it categorizes the average viewer as “extraordinary, to be found only in Brooklyn literary salons and certain converted lofts in Oakland, California”?  Probably not.  I’m not a data scientist, but from my cursory acquaintance with statistics, the idiosyncratic parts of the data aren’t what get the focus – by definition, you’re looking for the explanatory power of the systemic.  Nonetheless, thinking about the labels being applied to me by these anonymous employees was somewhat disconcerting, rather like imagining employees at the NSA crowding around their desk to laugh at your sexting (it’s like The Lives of Others except no one actually cares and I don’t live under threat of detention because I like bad television).   I don’t know how anonymous data analysis is inside these companies – perhaps that’s one of the points they would do well to explain.  Does my name ever appear on a whiteboard?  Does my name appear in a spreadsheet with all my labels, for some junior analyst to scroll through and slowly shake his or her head at?  Unknown.  But in any case, I can see reasonable business purposes behind Amazon’s decision to determine who likes books or new restaurants.  However, what you do with a list of ordinaries found in every neighborhood – or as we refer to ourselves within the community, “people” – is beyond me.  If these sorts of profiles are what drive all the advertising and junk mail in our online experience, I for one am curious just how I am reduced, and what I am reduced to, when my information is sold to third parties or even used by the company whose “terms and conditions” I agreed to.  More on that below.  Age and sex are one thing, but the impersonal, sometimes callous portraits outlined by algorithms and colored by data scientists defeat the whole purpose of my consumerist escapism.  If I wanted to consider my own ordinariness I wouldn’t put down my book to watch the show!

Webb points out that for all of Mark Zuckerberg’s mea culpa-ing (of which there has been remarkably little, I think – they need a better crisis PR firm) Facebook could not be more upfront about the fact that political campaigns are a specific vertical to which the company markets.  A user is rendered into one of five categories as well as measured by his or her ability to amplify a message, such that campaigners overt and hidden can choose their targets that much more easily.  As an aside, I think the amplification score is what really twists the screws here.  In the same way that many Americans are tired of the absurd sums of money poured into the swing state or district of the moment (looking at you, Ohio) simply because it’s competitive, we might resent the work put into capturing the attention of our loud friend who shares altogether too many links.  If you want to tell me I’m liberal or conservative and bombard me accordingly, that’s fine – after all, if I’m partisan, I’m more likely to be consuming partisan news sources.  Throwing fuel on a fire isn’t necessarily taking the moral high ground, but it’s better than starting new fires.  By telling me that my annoying friend is going to receive refined ads and articles such that he or she shares them, you are starting a fire.  More than that, it seems to be calculating and ruthless in a way that directly contradicts you believing in the merit of your position.  Blast me with your banner ads and email reminders, the modern equivalent of the whistlestop politician shouting to the crowd from the train’s rear platform.  If instead you pick the town gossip out of the crowd, escort them into the train for a private briefing, and then leave them behind to parrot your message while you slink away to the next town…can’t you at least take me seriously enough to give me your position yourself?  I recognize that metaphor is fundamentally flawed.  These days, politicians do stump themselves, AND blast you with banner ads, AND try to influence your loud friend to blast you with opinions as well.  So do corporations, nonprofits, and anyone else who has a voice they want heard in the growing cacophony of a connected world.  The small but critical (to me) issue is that, for the first time, the voices in that cacophony are starting to use what’s in my own head against me, to determine if they should scream more loudly at me or my neighbor, what to scream, how loudly to scream, and so on.  And I didn’t invite them into your head.  That’s the point.  It’s not the message they’re shouting so much as the lack of consent.

A point dealt with in a preview of the forthcoming issue of the London Review of Books.  William Davies, in a piece whose title – Why The Outrage – belies the tone of the first several hundred words, thinks we are too focused on Cambridge Analytica and President Trump in the current Facebook scandal.  I think his stridency on Trump vs. Hilary risks burying the lede, but his observations about the internet and capitalism are excellent; moreover, current and future critics of the Facebooks of the world risk future charges of hypocrisy if they choose to engage in this discussion on the basis of politics, rather than the larger underlying issue.  Davies hammers the fact that these are corporations, driven by corporate – not political – motives, and that if we are outraged we need to understand what capitalistic – not ideological – thrust got us here.  He points out that “Using data in novel (and secretive) ways is virtually the governing principle of the digital economy.”  And, related to my point above on consent, the argument that users of Facebook and other online services have consented to have their data gathered isn’t truly fair because we can’t understand how that data might be used – data’s “potential value and use emerges after one has collected it, not before.”  I wholeheartedly endorse that point.  I don’t think the average consumer could understand, even if Facebook became totally transparent about how his or her data is collected and analyzed, the sophistication of the techniques used to extract value from that information, nor still to think about its long-term effects and persistence.  Is there a parallel with Henrietta Lacks, the woman whose cancer cells proved so compelling as a research medium that the medical community immortalized them and continue to use them in labs some six decades after her death?  Perhaps Ms. Lacks didn’t have the medical knowledge to make a truly informed decision about the merits of preserving her cells for posterity, to clone them innumerable times and use them to – hopefully – make progress against the very disease that afflicted her.  You could argue that the experts made the best decision they could, that their specialist knowledge on balance helped them make a decision that has helped the world.  But they didn’t even tell her.  And regardless of what forms she filled out and boxes she checked, I certainly don’t think you can argue that they asked.

In any case, Webb’s point about us missing the forest for the trees on this one is well taken.  Facebook and its ilk sell user data.  Period.  To ask them to fix their service such that other people don’t steal your data is missing the point – it’s not the illegal part of this that is most concerning, it’s the mundane commercial part, and the fact that our data is treated as a resource that doesn’t require our consent to use.  As Davies argues – “Just as environmentalists demand that the fossil fuel industry ‘leave it in the ground,’ the ultimate demand to be levelled at Silicon Valley should be ‘leave it in our heads.”  I hope we are at the beginning of a process that leads to something like a Clean Air Act for data privacy.  I don’t know if the Cambridge Analytica scandal is the Exxon Valdez or Deepwater Horizon of internet firms, but I hope we can look back at this and see it as an inflection point, rather than a sign of things to come.