On Misinformation and Responsibility

With the pandemic still on-going, I’m not sure if this is the most fitting time. But I want to talk about misinformation and ecosystem responsibility.

We’ve been seeing some crazy things since the internet. Home remedy articles that are more poison than medicine: like drinking bleach or nonsensical herb mixes that at best do nothing and at worse are harmful. But tamer and almost-reasonable sounding misinformation exists too for those who think they’re more educated or prepared: information and “tips” like infection via pets or sanitizing masks via alcohol spray.

And unless you work in chemistry, biology, or come across masks often in your daily life— this sounds perfectly reasonable. After all, We’re all told alcohol cuts 99% of germs and viruses. If it works on my tabletop, why wouldn’t it work on masks? But it doesn’t, and because we’re not experts in it we forfeit the responsibility to verify to those we think know better.

Such misinformation is on every single side of the spectrum and exists in every demographic. Even moreso, it spreads not because of the malicious intent of every propagator, but rather the benevolent and hope of its believers. Facebook and Google have been doing everything they can to filter and delete this information. And I really do believe they’ve been putting in their honest effort.

Yeah places like NYT might still be able to find something, but that’s just because that’s how the internet is. Unless they’re asking for the internet to become a gated walled garden, that’s how it’ll always be too. Nevermind the fact that they have every incentive to hope and wish for a return to that reality.

But we don’t want that, because information goes both ways. Case in point, Twitter became one of the places where Dr. Chu was able to blow the whistle on cases already existing in Washington and WeChat was where Dr. Li had raised the first ever alarms.

So we have both misinformation and valuable information, that until vetted has the very real possibility of being mistaken for the other. Yet for some reason the loudest voices screaming for more technological intervention seems hell-bent on just the one: “fix it, block it, stop it.” They don’t know the “how” but are abosolutely sure on the “who,” “when,” “why,” and “what.”

The internet is about the democraticization of information. Whether thats right OR wrong information. And just like for a political democracy, FDR’s quote rings true: “Democracy cannot succeed unless those who express their choice are prepared to choose wisely. The real safeguard of democracy, therefore, is education.”

The internet is the same exact thing. On one side, thats a scary scary thought. Because there ARE things that are atrocious. Livestreaming terrorist behavior for example or things that just present an immediate and obvious physical harm like bleach remedies.

But we have to be able to balance that with the possible and practical. Of course we don’t want false information on the internet. Of course we don’t want bad actors to be able to rally others to their cause. Of course, of course, of course. But just like there’s an infinite array of good things, theres an infinite number of bad and its just not possible to automatically or remove and identify all of that in a prompt manner. Even more, it’s ridiculous to have that expectation: because we’ve never done that successfully in any point in history.

TV still has scams and directly misleading shows. Newspapers and magazines get sued successfully for defamation and slander. Radio has always had “pirate stations” that broadcast some not so saavy things. What are rumors but misinformation via the spoken word?

Yes the frequency is much lower because the investment costs used to be higher. Yes spread and reach is now higher and easier than ever. Anyone can make a blog or share a post. But while that means that there’s a lot more junk, it also means theres a lot more people who are and can be whistleblowers. Who can lead charges and make change. 

Maybe the reason why we’re extra hard on it nowadays is because its the most recent, the most viral, and at the same time— we see it as the most addressable. Because we see how scaleable and amazing technology has become. But I would say its the opposite, just look at what happened to Facebook when their algorithms blocked an iconic anti-war photo due to nudity. In this case scale doesn’t mean a solution or perfection, it means magnification of flaws and deficiencies. Because theres two ways to look at this: the algorithm blocked the image on purpose and correctly because it WAS nudity, or the engineer accidentally blocked it because the algorithm they designed could not take into consideration political, historical, and emotional context. When even humans struggle to read and make that context, how can we possibly think that dry code can?

So I don’t think that we can push this as a purely supply-side driven solution. As consumers we have to take up our responsibility in recognizing and identifying this sort of information ourselves.

And this is how it ties back to the pandemic. Because I’ve been very heartened recently to have seen this adjustment made by my own parents. My mother who previously fell for almost every medicinal gossip on what diets will lend to a 120 year old life now eyes every health article shared with caution. She looks to get her information confirmed with other sources. She looks to her own experience to make a logical check.

She actually said to me on the phone: “Hey, you can’t trust news on [XYZ App].” She’s not adept with technology. She never graduated college. Nor is she particularly scientifically or politically informed. But yet she’s developed the new skill of passive information filtering required for our new day and age.

We need to recognize that a real working solution is going to require fundamental changes on the consumer-side, and we need to accept that as soon as possible so that we can push and incentivize such change immediately.

Companies can and should ban, be wary of, and design their product to disincentivize bad behavior. But they shouldn’t be the ones to dictate what information is or isn’t correct. Nor should we want the consequences that come with such a solution. By giving up responsibility, we are at the same time giving up our own power and the promises of the internet. Maybe this is just my upbringing as an American, but that’s just such an unnerving idea.

We have to be able to accept this weight of responsibility. And thats uncomfortable. Its going to be a rough transition. Especially in times like this when its during a pandemic. Because people are scared, and bad information can mean life or death. But I don’t think there is a technical solution. At the end of the day, humans need to adapt and learn and evolve. We’ve stopped evolving biologically since we’ve exited nature to a certain extent. But now we have the adapt and evolve mentally, cognitively, and as a society.

Money isn’t money, stocks aren’t companies, and everything is gold

This is a big shift from what I usually write about, and for those reading I hope that its okay. As the last post mentioned, I really want to get away from the idea of only writing things that scale or try to position myself as some sort of seasoned professional. Instead I want to simply only write as me. And that means pretty scattered thoughts. It’ll still revolve around product, around strategy, and around technology. But it might have some things about finance, education, or even random experiments I’m partaking in my own life or mind. Things that align with my own specific background and experiences, but not necessarily “professional” or business/technology related.

As always, thank you all for reading.

As the title gives away, the topic I want to talk about today is money. It’s about stocks. Evaluations. What money really means as a symbol and to an individual.

Specifically I want to talk about the stock market in recent years and its meteoric rise. We really can’t go even hours nowadays without seeing some article or reporter talk about the market breaking all time highs. This is almost always followed by gloomy predictions that we can’t maintain these groundbreaking evaluations forever. That they’re not sustainable and break our common sense in terms of evaluation metrics. That the collapse is near, things are out of control, and it’s just a matter of time.

And for the most part, this has been taken as gospel. Even though the market gets higher and higher almost every single day, there’s a lot of people— myself included— who agreed with these articles. “It has to come down. It just doesn’t make sense.” And that might be one of the reasons why more than ever, there’s a whole lot of money and people still sitting on the sidelines.

Even with the current CoronaVirus, it’s still around all time highs. It’s been almost a month since what some have built up to be the next pandemic, and yet outside of the tumble of a few days, we’re dancing but a couple percents from the top. Isn’t that ridiculous? If stocks are just shares of companies, unless the companies have become more valuable— which they especially wouldn’t in a pandemic because of suffering sales— they shouldn’t go up in value. Isn’t that just common sense?

But what if that wasn’t the case?

What if it was this fundamental understanding that was the mistake itself? What if we misunderstood the very basics of even what money is? And that the very way that we’re measuring stocks (their worth/exchange in currency) is much more complex than that statement portrays?

We know money as the simple store and representation of value used for exchange. We pay for a bag of chips with money. Chips have value. Our paper (or digital bits) have value. We trade them.

But money is not a singular entity. Instead, money is then abstracted further into multiple forms of currency. It’s an overarching group, where currencies in this case represent forms of money. It’s “money for money”— if that makes sense. And that means that though all of our currencies are stores of value, they themselves flucuate in relation with each other because they differ in supply and trust.

We already know this in terms of exchange rates. But when we combine that with inflation, especially different rates of inflation, things get a lot more squirrelly.

And the way that this ties back to stocks, or rather any asset at all, is to actually get away with the learned focus on currency— and back on the equation of money (or value, if that makes it less confusing). Because of how we use it in our everyday lives, we see currency as a very unique store of value because it is what we use to exchange most often and most directly. To the layman, their domestic currency is an anchor— a stable point in which we base our fundamental unit of value on. But ask any financial or wealth advisor and they’ll simply mark it just as another number in the “asset” column probably with stocks and real estate. Or ask Zimbabwe during hyperinflation. Currency is not money. Currency is just a store of value that fulfills the function of money.

Which means that stocks are currency. Paintings (which the rich use to store value) are currency. Buildings are currency. Even the things we trade currency for, like milk and eggs, they are also currency. Currency that rapidly depreciates as time goes by, but currency nonetheless. In other words: a dollar is a dollar, until it isn’t. And when it isn’t enough, we need something else to represent a dollar.

And when we get to this point, that’s when it starts making sense. Stocks, paintings, and buildings are fixed to a certain extent. But monetary currency is not. That’s why we have inflation, and in a decade of global quantitative easing— it’s something that exploded in supply.

But does that really answer it? Inflation has always existed, and this relationship has always existed as well. We know that a home could have sold for $100 back in the 1800s but may be $1,000,000 now. Is it really sufficient to pin it as the reason for the spike in the last few years?

I think so. Because the reason is the deadly combination of ZIRP (Zero Interest Rate Policy) and massive QE (Quantative Easing). This one-two punch has basically gutted the traditional trust in a government and its currencies. By giving nothing for saving currency in its currency form, and instead even punishing it by actively engaging in an activity that devalues it— governments worldwide are essentially forcing people to reject currency.

Like milk approaching its expiration date, currency by itself has no escape (a healthy interest rate) from losing its own value.

So the people who know avoid it like the plague. Instead they are looking for ways to keep their value/wealth constant. They might even massively leverage themselves because what used to be a danger that grew larger (a debt payment with increasing costs) is now its very opposite… a debt payment that gets cheaper with time…

If i can borrow $100 to spend $100 worth today, and pay $110 a year from now when $110 is worth last year’s $80, I’d be a fool not to do it. It’s literally free money.

The second wrinkle in this is actually the fact that our world is intrinsically and almost irrevocably connected more than ever. The fact that almost every country is using a ZIRP and QE, means that everyone everywhere is chasing assets because they’re looking to maintain their wealth. It’s essentially a loser’s game of chicken because noone can afford not to.

If everyone is pursuing QE and ZIRP, then the one person who isn’t— the one person who has a stable currency and a positive interest rate no matter how small— will see their assets swallowed by international demand. Because their assets, land, stock, or currency, are the most stable stores of value. Sound familar Toronto real estate and US equities?

And so everything is gold. Because everyone is afraid and has no trust in currencies.

We all lose with this. And unfortunately, its the middle and lower socioeconomic class who lose the most (as always). They are the ones least able to diversify their wealth, as they are the ones who— unable to scrounge up the funds to purchase assets or lacking the knowledge to— have the majority of their wealth in currency.

Combined with policymakers’ hesitance towards wage growth (claiming that it raises inflation even though they actively engage in QE and low interest rates which does it much more directly…), I have a strong supicion that this is the real reason that real wealth and savings amongst median households is lower than ever. How even in an era of record low unemployment we get statistics where 63% of households can’t even muster up $500 for a rainy day.

This system seems messed up. And as someone who loves the free market— I’d call it a failure caused by broken and flawed tools rather than an inherent flaw in capitalism. This is artificial, but if the only way to fix it is a gut-wrenching crash, then I’m not sure we can live to stomach it.

Perhaps this is the natural end point of consumerism. Governments push ZIRP and QE to force spending— because it’s better to spend your $100 to get $100 worth of stuff now than save it and only be able to use it as $75 later. It makes for great GDP numbers, creates demand, and ensures jobs. But it actively creates a widening wealth gap and punishes people who possess the virtues we all spout and pretend to extol: frugality, self-sufficiency, and preparedness.

We’ve gone too far. Governments wanted us to spend, so they made currency poisonous to hold. And yet most of us can’t hold enough poison to get into the things that aren’t.

On scaling, thoughts, and life

I don’t really have an excuse for the amount of updates that this blog has. From trying to follow a consistent schedule in the beginning, to the eventual forfeit and writing purely based on “guilt and obligation,” it’s always been pretty difficult to determine what to write and submit.

It’s not that there’s nothing to write about. Donny and I had concluded long ago that the lethargy was a result of wanting to write something to scale. This blog, being our platform to the public, was both a pedastle and a broadcast. A spot where we internalized as a place to only put our best and brightest ideas: thoughts and philosophies that we could be proud of and establish ourselves as thinkers and the experienced.

Which is ironic, seeing that we’re also painfully aware of our inexperience from the mere fact of our age and still pre-double digit tenure in the professional world.

As a result of that, under the few posts that are already on the blog, there lies a graveyard of posts never submitted. Just browsing through a few of mine: there are topics ranging from content filtering, trust in distrust, and some other concepts that at ideation seemed solid and elegant enough until put onto paper. The thought is as always thought, as Silicon Valley is oft to repeat: What’s the value-add?

And that’s when we feel that quiet inner voice answer: “There is none.”

Of course, the answer is to just… not think that way. But once established, it’s hard to do away with. We are trying though. We’ve created PocketDial: a podcast where we’ve designed from the get-go to be much more grounded. It’s still topics, but we’ve forced ourselves to go into a medium where there’s nothing but uncensored and spontaneity. The podcast itself took about 6 months to finally get going: most of it spent between procrastination and convincing each other that it was the right move after answering questions like:

1- But can a podcast scale?
2- How can we protect ourselves?
3- What would we talk about?

As you can tell, this was leading to the same dilemma as the blog. And so before the first episode, we had to establish some ground rules:

1- No more than 10 minutes of editing
2- Talk about whatever we want
3- Talk. Do it. Schedule the episode and no matter how bad it is, release it
4- Don’t care about numbers

So far we only have about 4 episodes. But it feels like a weight has been lifted off the shoulders. For one, outside of adding random topics to a shared Notes app time to time and scheduling the calls, there is no work. We free-form our conversation and let it flow. When one of our recent episodes had a major audio syncing problem— causing lag between our two tracks that made for awful hearing— we still went ahead and released it.

And that in itself I think is inspiring. To me at least. I think if we didn’t, if we hid that track, then the future would just be like the graveyard of blog posts we have now. Instead we got ahead of it: willfully and consciously deciding to show an embarassing/“lack of quality” side and now feel much more free.

This long talk about our decision to start a Podcast (note: this blog will still keep going, though again— with hopefully more updates) points to the idea on scaling. Presenting the best side so that it can be replicated ad infinitem. And how utterly paralyzing it is.

And from this. From Donny and my’s hand at our college startup. To even our two current separate jobs as product managers, I think show again and again how difficult and actually counter-productive it is. In the tech space, we are told to scale to make money. In finances, the version is passive income. In marketing— viral marketing. And let’s not forget about automation.

There’s a time and place for it. And our professional lives always have us thinking about it. How to best create a machine that once placed will generate value across millions of users almost as if on auto-pilot.

But people, life, and even products are not like that. Not at least in the beginning. In the beginning it’s all about change. Learning. Testing. How can we possibly only show a good side when we know nothing? Products are likewise in the beginning as well. So how could our thoughts, blogs, and perspectives be any different?

To expect otherwise is insanity.

If we don’t use money, what do we use?

Sorry to everyone for the delay. Though it’s not unusual for this blog to have long pauses between articles— it’s definitely never been the intention to have this sort of gap for what should be a follow-up/sequel. The trade wars that have played out so intensely over the past few months have had quite a bit of relevance on this topic, and so it was put on hold until now. Without further ado…

Without reaching into the bucket for motivations like civic duty, I’d like to simply companies as basic widget work units. Some sort of simple black box that takes costs, resources, and opportunity to churn out an output (perhaps represented by stock price or some other form of validation).

Costs would be external imposed necessities: taxes, regulation, tariffs(cough)

Resources would be materials for production: physical and intellectual

Opportunity is well… opportunity: Market, timing, trends and user behavior

So far, governments have by an almost absolute margin only thought of incentives in terms of monetary costs. The country-wide deal hunting spree set off by Amazon was an example of it in play— come and we’ll increase your bottomline. The current threat of tariffs to move companies back to the US is the reverse— come back or we’ll destroy it.

Continue reading “If we don’t use money, what do we use?”

Offer It, and They [Still Won’t] Come: Should governments use money to lure companies?

Ever since Amazon’s country-wide fishing expedition, the question has drawn incredible vigor and debate. Even after the selection and their withdrawal from New York City however, the discussions seem to have died down but the answers are no closer. Those in favor argue for the long-term benefits, and worship it almost as a surefire way for economic growth. Those against are not much better— regarding any offer as a deal with the devil hellbent on gentrification and socioeconomic inequity.

To step away from the extremes of both ends, I want to restart the argument from ground-up. Or as the now turned-corporate-buzzword would be “from first principles.”

To start off, we need to make some basic assumptions on what the goals of the deal are. Though not exhaustive, I will think of them as:

  1. Introduce a new stream of future tax revenue
  2. Encourage the local/regional entrepreneurial and technological economy by employing locals to the new high paying tech jobs
  3. Help transform the existing infrastructure towards a forward looking culture and system to make it more resilient and strong against future economic and technological/social shocks
  4. The company investing in the area has such positive effects on points 2 and 3 that it brings in more companies that themselves have positive feedback effects for all points

Though it’s easy to quantify point 1 (as it is often the number thrown around within the arguments for the deals), it’s much harder to define or even make concrete goals for the others. I think it fair to say however, that the point of the latter three are to create an almost second Silicon Valley— as defined as a central tech hub associated with job and quality of life growth.

Photo Credits to Carles Rabada

With the goals in place, let’s have a brief examination on possible outcomes. For simplicity’s sake, I have but two outcomes in mind: success and failure. Success means that the company takes the deal offered. Failure means they don’t.

The big issue is that failure is very real. Take Amazon’s bid, a tale of but 2 winners for a country of 50 states. The biggest problem with failure (and success arguably) is a question of moral hazard. Winners suffer less as they reap the presumed rewards, but losers have shown to the world their soft underbelly: “This is how much I will beg you to come to me. Do not otherwise.”

But what about success?

Continue reading “Offer It, and They [Still Won’t] Come: Should governments use money to lure companies?”