This is gonna sound crank-y but Freddie has backed into a classic Austrian Economics truth - easy money causes a huge amount of speculative activity. Because credit is so cheap, people invest in terrible, shitty ideas like a national chain of stores where you can eat cereal in your pjs like a six foot tall toddler, or bespoke ice cream made just for you in an incredibly expensive brick and mortar setting.
And since it's been so easy to get credit, everyone tries to create something with exponential growth/immediate scale and debt finance their way there, because it's cheap to borrow and if you make infinite money in the future it's basically free to borrow.
It's called "malinvestment" and I think it's the root of a lot of the sense that nothing matters and the economy is fake - from the bottom end of the labor pool to the upper middle, people are hustling like crazy to give some bank/funder a moonshot with no real potential for individual advancement. We want everything to grow like cancer and enthusiastically throw armies of 20 year olds into entry level shitty jobs in pursuit of getting the cancer to metastisize faster.
The problem with Austrian Economics is that where they’re right, their insights have long since been absorbed into the orthodoxy. Where they’re wrong, in the sense that their beliefs lack predictive/explanatory power, they’re extremely wrong. This insight is one instance of the former, the belief that cheap money and artificially low interests rates/bad incentives create asset bubbles is a fairly mainstream position. Lots of orthodox economists saw the housing bubble coming.
“ Lots of orthodox economists saw the housing bubble coming.”
No they didn’t. The key fact was that is was a global (not just national) substantial fall in real estate prices. Essentially no one saw that coming. They thought maybe Phoenix could be in a bubble or Tampa or Dallas. But not everywhere in the US and Dublin and London and Madrid and Singapore and…
That’s fair. The way subprime mortgages were packaged together and buried in complex financial instruments, which were then bought and sold on the global financial markets was pretty novel, though. Not many people outside of those working directly in finance were aware of what was really going on.
It was actually workable until the sub-prime mortgages came along. You can thank settlement of Barak Obama vs Citi Bank for that decision. Unfortunately google has scrubbed the lawsuit from memory, but the gist is that then Senator Obama sued Citi Bank for not writing enough sub-prime mortgages. Obama made $3MM; the banks had to write every krazy sub-prime mortgage, and the whole economy took it in the shorts.
Anyone with open eyes could see the housing bubble coming. When my wife told me about her boss, who had $250k in mortgages on a double-wide in a mobile park, that he was refinancing and buying every toy imaginable, cars, boats, jet-skis, etc. That's when I knew there was a crash coming. Of course he divorced his wife, changed his gender, and skipped off with all the toys. Is a used double wide in a park worth $250k? I think not.
If you were anywhere near the street, the words you constantly heard were "I'm gonna flip tha' muther" ... Every fool bought a house in a skyrocket market and planned to flip it and get out before making the first mortgage payment ... and most just couldn't seem to time the market right and held it through the fall. The loan writers didn't care, they made their commissions—sold the loans off to be rolled up into a financial instrument. Lehman Brothers insured the mortgage under the rubric that if a borrower never made one payment, the bank would recover 80% of the loan worst case, and only 1% of mortgages would fail worst case. In a severely overpriced market, the bank couldn't recover 50%, and when too many sub-prime mortgages were fraudulent, far more than 1% failed ... then Lehman Brothers failed. Then it turned out that our 401K money markets were buying those financial instruments.
Freddie, I just had an image of you, with reading glasses perched on the edge of your nose, hands folded, leaning intently over an old, wooden desk, looking seriously at your readers, and telling them to stop fucking around and invest in indexed mutual funds.
index funds rn are majorly overweight big tech. just apple, google, microsoft, meta, nvidia, amazon alone make up about 25% of SPY. just fyi for anyone who doesn’t want to be long big tech
I think a lot of this comes from the idea, almost universally accepted among millennials from 2008-2020, that you absolutely will never retire or even own a home using 'job money.' This is clearly not true for most (it's true for me, though, i'm a teacher) but the desperation to have any kind of secured future after the infinite promise we were all made our whole lives dried up suddenly is completely understandable. People started investing in stupid ideas because the numbers always go up, during covid they started working five do-nothing jobs remotely, all because of this real fear, confirmed repeatedly in my lifetime, that you simply cannot trust things to keep working the way they have been and that no one will watch out for you but you.
Yes. I am constantly telling people that perpetuating the myth that Millennials will be broke forever doesn't actually point us in a progressive direction.
I think it encourages heterodoxy since it builds on the idea that the status quo has failed, and that people who believe in the system as it exists are suckers. So your career is probably at least enhanced by the belief that you can't win in the current system, and so far as you get political converts it's from people who feel failed by capitalism. But yeah that's a breaking down of the commonwealth rather than building towards anything specific, and the same thing I say of you and your politics can be said of any influential substack (or other) 'heterodox thinker' from the Rationalist community all the way down to your Andrew Tates and Alex Joneses.
No, what I'm saying is true now. Their actual wealth or lack is not what I'm talking about. Fear is what I'm talking about, and that fear is absolutely pervasive
Very good point. I think as a parent after the 2008 crash, which hit us very hard, I really fed into that thinking with my kids. It really did look like the job market was all going to low paid gig work. I was very concerned about their futures.
But I always promoted the philosophy that you needed enough money to live and a job you liked, but being rich wasn't the goal.
Right now, in an economic sense...that is. There are obviously many worrisome things looming in the future. Our economy is the envy of the world right now.
Flatly untrue unless you're using more-or-less meaningless metrics.
`A U.S. boomer born in 1960, for example, with an annual savings rate of 10% over 40 years will have generated lifetime savings of more than 850% of their disposable income.'
`Millennials born in 1984—who saved at the same rate as their parents’ generation—will see their total lifetime nest egg amount to just over 430% of their disposable income.'
Millennials will also get to deal with the mess that is social security and medicare, since our parents largely could not be bothered to do so and yet continued to demand more-and-more.
It says a boomer born in the 1960s, not investing in the 1960s. Regardless, the analysis assumes the same savings rate. For millennials to be as well off as the boomers requires additional savings.
Those numbers don’t tell you anything unless you quantify the disposable income of each group. I might take 430% of a higher disposable rather than 850% of a lower disposable income even if the latter is still higher than the former… because it means I will have had a higher disposable income during all those years of saving.
I don't understand why you think there's a triple negative. Statement: it is impossible to retire or buy a house with money from a job. Negation: this is not true. Parenthetical: except for me, a teacher. This is, to my mind, an incredibly straightforward grammatical construction. You might disagree with any part of it but I'm not following how you found it confusing.
As for the teacher thing, that was a self-deprecating joke, mostly. I teach private school so there's more truth in it than for most, since we don't get a pension, but I do OK
no retirement or house -> not true -> not not for teachers
It's not an explicit grammatical triple negative, but at least a conceptual one*.
I believed it to be false assertion based on various financial data and some properties of averages. Since triple negatives have a high false rate of construction, it was not obvious to this reader whether the triple negative was intended, or the assertion made was intended.
You've now clarified which. Thank you.
*My favourite linguistics prof would have argued that there is no such distinction.
You're probably not kidding ... but displaying a lack of economic experience.
Almost every job in the US is tied to the minimum wage. Even those hundred bucks an hour fork-lift drivers. Every rise in the minimum wage is realized by all workers. Every cowboy, every meat cutter, every truck driver, every burger flipper ... and when they all get a raise, the price of cattle goes up a little bit, the cost of cutting up cattle into hamburger goes up a little bit, the cost to get ground beef to the store goes up a little bit, the cost to flip a burger goes up a little bit more ... and that hamburger costs a little bit more. And it all comes out the same.
California fast food workers earn twenty bucks an hour, and a simple burger in California now costs $15, and no one goes to buy burgers anymore and the restaurants are laying people off.
And this is exactly why the USSR failed, Cuba failed ...
It seems as if you're aiming low in life. This is an unfortunate trait I see in many teachers. I do believe teachers—at least at the high school level—should be drafted from the pool of older industry workers. Because it seems to me that far too many students in college with no real career aim decide to 'take the low road.' I've heard more than one college student say this "I'll just take the BA and become a teacher." I think it stems from the student seeing they're not going to pass the math portion, thus can't take the physics, thus can't get the Bachelors of Science degree. Without the BSc. they're not going to get a science job. This is not the path they planned for, but the path they'll have to accept considering the circumstances.
Do these students—ergo new teachers go on to inspire their students? I think not. All of my inspirational teachers came out of industry.
We take the most depressed uninspired graduates and turn them into depressed uninspiring teachers.
Change the formula here. Find another career, a career where people put in long hours because they love their jobs, a career where the boss hands out bonuses, options, and other nice perks to keep the talent. After ten years of this, come back to teaching and be an inspiration.
This is the stupidest thing I've ever read, and I read high school essays. I'm sorry that you equate 'aiming low' with accepting a lower salary, and that you feel contempt for education as a field. Obviously our profession failed you and for that I am sorry, but I assure you there are others who benefit.
Many or most financial scams are based on exploiting the same mindset. Someone who believes that a way for them to get rich quick must exist is going to be gullible when someone offers one. That's why there are so many repeat victims; so long as they continue to think that way, they can be exploited again and again and again.
Reading about Softbank and other investors like them, it's hard not to see the similarity. In a weird way, you could say it's AI; the artificial pseudo-mind of the corporate entity is displaying the same pathologies as a flesh-and-blood person. But maybe that perspective does too much to obscure the individual failings of the people running those organizations.
I think this is exactly correct, and also extremely frustrating. Particularly because it's one of those very common situations wherein gullibility and exuberance can be highly rewarded, while prescience is worthless, since, as they say, the market can remain irrational much longer than you can stay solvent. The thing I really just don't get is why anyone finds LLM type AI so exciting - what could be more dystopian than outsourcing human creativity to a machine. Especially one that, to my mind, unfairly appropriates the products of human creativity and makes it all the property of the tech oligarch class.
from the perspective of the history of AI it’s a miracle. they’re doing stuff that seemed impossible ten years ago, and there’s one system doing it across like 5 different areas of AI. it’s like someone found alien technology from outer space.
if you put ChatGPT in a sci fi novel in 2005, people would have mocked you for bad world building and not understanding technology.
the uses to which this alien technology is put is increasingly sordid and depressing, it’s true, and the economic value is doubtful.
I'm sure AI will fit in somewhere but I see the election being contested and some nations on the global scene to pick the moment the US is counting chads to go ahead with WW3. By the time the US figures out the election it'll be split into two ready to start a Civil War with each side choosing a different side in the World War to fight on.
You're right and you're wrong. YES, AI is impossibly overhyped, and generalized intelligence is vastly harder than most people think. I'm a daily user of ChatGPT both for general fact-finding and specifically for software development, and I'm continually frustrated by the "hallucinations". It turns out that AI is optimized to be persuasive, not accurate -- it's extremely good at generating answers that _sound_ right, but aren't necessarily true. (Much like junior programmers.) So, no, it's not going to put all the software developers out of jobs.
On the other hand . . . I spent most of my 20+ year career searching on Google for technical information, and now I default to using ChatGPT instead of Google for my first query. I use it every day. Every single developer I know uses some form of AI in both research and direct code generation. (They complain about its quality, but they still use it.) I can't remember the last time a single technology got such huge user adoption so fast. Oh, wait, I remember now . . . it was Google Search. So, yeah, AI is a pretty big deal, and a potentially Google-sized one.
Yeah, my impression is the same as yours. But what you left out is how quickly it is improving. If we think we're still in the steep part of the S-curve it is hard to know its value in the future. Kind of like the internet, yeah for sure there was a bubble in 2000, but it turned out to be correct, in the sense that something really big was coming. It's hard to predict the future. Which is what I'd title this piece.
ChatGPT as a google replacement simply reminds me of just how shitty Google (and search in general) has become. Every time I have to go to google because GPT can't provide reasonable sources for its answers I hate my life.
I've gotten very irritated with Google search. All they want to do is sell me something. I avoid anything that's Sponsored, though occasionally that's where I need to go.
Well, ChatGPT and other AI services also need to figure out a way to make money and I wouldn't count out targeted advertising that is much more insidious!
It would be the most shocking development in history if another Google did NOT come, at some point. New corporate giants always arise somewhere, sometime. But what will that company be involved in? That's the real question, and it certainly may have nothing to do with AI.
Any number of solar focused companies could become enormous giants in this century as we turn toward that energy source. It's on an exponential growth curve as we speak, and that's where I'd put my money if I had it to give. And if solar, or some other type of energy generation, get's cheap enough, an efficient carbon capture company could also take that niche as climate change gets worse and worse and government's begin to invest in earnest.
Big Tech has two or three years before they have to start writing off ~$200B of AI servers. That's how long they have to find a sustainable end user market.
ChatGPT has gone from kindergarten level to elementary schools to high school to college level work in a few years and you think that has no future? Seems unlikely.
It doesn't matter how impressive the tech is if it doesn't make money. For now, there aren't enough use cases and end users willing to pay the kind of money that would justify the investments currently required to build and sustain this tech. The factors that make it so expensive, like GPUs and power constraints, aren't going to be resolved in the next few years.
They are the "manufacturer" in this chain. If their "customers" (e.g., Microsoft) don't find they can make money with the product they are buying, the sales will slow down quickly. I mean, I pay $20 per month for ChatGPT, and do so happily. I'd have paid $20 a month for a Google that didn't work like total shit and just gave me web sites that are fucking relevant to my search too, but that isn't a option as far as I know.
(I'm expecting that, in less than 20 years, I'll be swimming through advertising diarrhea in ChatGPT as well, or some other enshittification that results from margin squeeze.)
> I'd have paid $20 a month for a Google that didn't work like total shit and just gave me web sites that are fucking relevant to my search too, but that isn't a option as far as I know.
I generally agree with the premise that AI is probably overhyped.
However, my intuition tells me that there's some misunderstanding of who benefits most from interest rates and how actual VC companies funding startups work. Bear in mind, I'm no expert on this and haven't reviewed the data (mostly because I'm not sure where I'd look to find the right data).
First, VC companies are not looking for Google or Facebook (though I'm sure they'd love to find that). They typically fund a startup with a relative pittance, and then get out when they can make 10x or 100x their money. So if they invest $10 million, if they get out when that business is worth $100 million or $1 billion, that's a huge win for them. There are many, many, many companies that reach those milestones, and enough of them do so quickly enough to be worth the investment and keep the VC firm profitable even with failures. There's also the simple fact that it's not just "either the startup goes out of business, or it's x10 or x100. In many cases, it may simply be a small gain or a small loss.
Second, I suspect VC firms rely less on borrowed money (though I'm sure they take advantage of the near-zero interest rates when they are available), so I think interest rates are not some massive boon to VC (except insofar as the companies they invest in can also afford to borrow a lot, making it easier to invest).
I suspect the companies that have *really* benefited most from low interest rates are private equity firms: firms that make a living buying up companies, "growing" them (or merely taking loans against them to cash out), then reselling them again. These guys thrive on low interest rates; it protects them against mistakes, and ensures they can almost always get SOME kind of payout, even if it's only a matter of taking a loan out against the owned company's balance sheets, pocketing the money, and then selling the company for a fairly minor gain.
One phenomenon that I find fascinating is how the future differs from the predictions, how the experts can get it so right and so wrong.
When the Dot.Com bubble was in full swing, lots of people thought EBay and Boo and pets.com were the future of business. Amazon did happen. But nobody was talking about business process outsourcing.
Yep. Pets.com is my favorite goto when talking about that era. For me the tech bubble was not the same as something like the Tulip bubble. The latter was actually a bubble, the former was correct in predicting the magnitude, but as you mentioned, it was hard to know the exact way it would evolve. Which to me makes perfect sense.
It really was a bubble, but definitely not in the tulip sense. Being able to secure millions in funding (and IPOs!) when not even having a product was absolutely a bubble. It's simply that the bubble was driven by actual potential causing a lot of fear of missing out on the growth of a huge new sector of the market.
This ties into Freddie’s observation that he’s not a big fan of ambition. And the next big thing is going to be built on megalomaniacal levels of ambition and Freddie wants no part of it.
My first thought when I started this piece was about Nvidia. NVDA was brought up as some sort of outlier but their growth started well after Google's and they are now bigger than Google. I don't know, but I think that is the perfect answer to who says there will be another Google, it's NVDA. This should have been titled: "Who says there will be another Nvidia."
"I mean, look, Aramco and Exxon and Chevron etc. remain huge firms despite being the opposite of sexy, right? The oil and gas business is a really good one to be in. Big profits, huge market caps. But nobody is basing their whole investment strategy on the idea that there absolutely has to be some hot new oil company startup that definitely will emerge. Why would anyone think that?"
Oil, qua oil, is played out. Energy, however, is not. And we see this in all of the scratching about for new sources of it. We see solar startups, wave tech start ups, and so on, whether they work or not as a viable way forward. But, we also see that crippled by various factions in the gov't.
Now, imagine a company that came up with realistic, workable nuclear power sources that are basically the size of a railroad boxcar. How quickly do you think that would draw investors? I would guess you would get your hockey stick right there. Now, as nuclear development has been curtailed by a massive regulatory environment, any investors would be, quite correctly, shy of dumping the needed cash into that idea to both make it work get in on that hockey stick.
For what it's worth, I have a read a LOT more articles about AI skepticism in major publications the last couple of months. At a certain point, the facts will be the facts, and there is no way the investments can be justified without the returns.
I'm concerned about the huge energy outlays. Shall we dump that much more CO2 into the atmosphere for what? Some of the scientific and technology research yes, but new ways to scam the public and generate sales...I don't think so.
This is gonna sound crank-y but Freddie has backed into a classic Austrian Economics truth - easy money causes a huge amount of speculative activity. Because credit is so cheap, people invest in terrible, shitty ideas like a national chain of stores where you can eat cereal in your pjs like a six foot tall toddler, or bespoke ice cream made just for you in an incredibly expensive brick and mortar setting.
And since it's been so easy to get credit, everyone tries to create something with exponential growth/immediate scale and debt finance their way there, because it's cheap to borrow and if you make infinite money in the future it's basically free to borrow.
It's called "malinvestment" and I think it's the root of a lot of the sense that nothing matters and the economy is fake - from the bottom end of the labor pool to the upper middle, people are hustling like crazy to give some bank/funder a moonshot with no real potential for individual advancement. We want everything to grow like cancer and enthusiastically throw armies of 20 year olds into entry level shitty jobs in pursuit of getting the cancer to metastisize faster.
The problem with Austrian Economics is that where they’re right, their insights have long since been absorbed into the orthodoxy. Where they’re wrong, in the sense that their beliefs lack predictive/explanatory power, they’re extremely wrong. This insight is one instance of the former, the belief that cheap money and artificially low interests rates/bad incentives create asset bubbles is a fairly mainstream position. Lots of orthodox economists saw the housing bubble coming.
As they say, Austrian economists have predicted 23 of the last 5 recessions
“ Lots of orthodox economists saw the housing bubble coming.”
No they didn’t. The key fact was that is was a global (not just national) substantial fall in real estate prices. Essentially no one saw that coming. They thought maybe Phoenix could be in a bubble or Tampa or Dallas. But not everywhere in the US and Dublin and London and Madrid and Singapore and…
That’s fair. The way subprime mortgages were packaged together and buried in complex financial instruments, which were then bought and sold on the global financial markets was pretty novel, though. Not many people outside of those working directly in finance were aware of what was really going on.
It was actually workable until the sub-prime mortgages came along. You can thank settlement of Barak Obama vs Citi Bank for that decision. Unfortunately google has scrubbed the lawsuit from memory, but the gist is that then Senator Obama sued Citi Bank for not writing enough sub-prime mortgages. Obama made $3MM; the banks had to write every krazy sub-prime mortgage, and the whole economy took it in the shorts.
Anyone with open eyes could see the housing bubble coming. When my wife told me about her boss, who had $250k in mortgages on a double-wide in a mobile park, that he was refinancing and buying every toy imaginable, cars, boats, jet-skis, etc. That's when I knew there was a crash coming. Of course he divorced his wife, changed his gender, and skipped off with all the toys. Is a used double wide in a park worth $250k? I think not.
If you were anywhere near the street, the words you constantly heard were "I'm gonna flip tha' muther" ... Every fool bought a house in a skyrocket market and planned to flip it and get out before making the first mortgage payment ... and most just couldn't seem to time the market right and held it through the fall. The loan writers didn't care, they made their commissions—sold the loans off to be rolled up into a financial instrument. Lehman Brothers insured the mortgage under the rubric that if a borrower never made one payment, the bank would recover 80% of the loan worst case, and only 1% of mortgages would fail worst case. In a severely overpriced market, the bank couldn't recover 50%, and when too many sub-prime mortgages were fraudulent, far more than 1% failed ... then Lehman Brothers failed. Then it turned out that our 401K money markets were buying those financial instruments.
Freddie, I just had an image of you, with reading glasses perched on the edge of your nose, hands folded, leaning intently over an old, wooden desk, looking seriously at your readers, and telling them to stop fucking around and invest in indexed mutual funds.
Thanks for the writing, as always.
index funds rn are majorly overweight big tech. just apple, google, microsoft, meta, nvidia, amazon alone make up about 25% of SPY. just fyi for anyone who doesn’t want to be long big tech
I think a lot of this comes from the idea, almost universally accepted among millennials from 2008-2020, that you absolutely will never retire or even own a home using 'job money.' This is clearly not true for most (it's true for me, though, i'm a teacher) but the desperation to have any kind of secured future after the infinite promise we were all made our whole lives dried up suddenly is completely understandable. People started investing in stupid ideas because the numbers always go up, during covid they started working five do-nothing jobs remotely, all because of this real fear, confirmed repeatedly in my lifetime, that you simply cannot trust things to keep working the way they have been and that no one will watch out for you but you.
Yes. I am constantly telling people that perpetuating the myth that Millennials will be broke forever doesn't actually point us in a progressive direction.
I think it encourages heterodoxy since it builds on the idea that the status quo has failed, and that people who believe in the system as it exists are suckers. So your career is probably at least enhanced by the belief that you can't win in the current system, and so far as you get political converts it's from people who feel failed by capitalism. But yeah that's a breaking down of the commonwealth rather than building towards anything specific, and the same thing I say of you and your politics can be said of any influential substack (or other) 'heterodox thinker' from the Rationalist community all the way down to your Andrew Tates and Alex Joneses.
Millennials are richer than any generation before them. What you’re saying was true several years ago but it’s not true now.
No, what I'm saying is true now. Their actual wealth or lack is not what I'm talking about. Fear is what I'm talking about, and that fear is absolutely pervasive
Very good point. I think as a parent after the 2008 crash, which hit us very hard, I really fed into that thinking with my kids. It really did look like the job market was all going to low paid gig work. I was very concerned about their futures.
But I always promoted the philosophy that you needed enough money to live and a job you liked, but being rich wasn't the goal.
Almost 20 years later things look better.
I feel an almost indescribable horror at your last sentence
Right now, in an economic sense...that is. There are obviously many worrisome things looming in the future. Our economy is the envy of the world right now.
i just mean the 20 years thing. Damn
Flatly untrue unless you're using more-or-less meaningless metrics.
`A U.S. boomer born in 1960, for example, with an annual savings rate of 10% over 40 years will have generated lifetime savings of more than 850% of their disposable income.'
`Millennials born in 1984—who saved at the same rate as their parents’ generation—will see their total lifetime nest egg amount to just over 430% of their disposable income.'
https://fortune.com/2024/10/03/boomers-wealthiest-generation-millennials-biggest-losers/
Millennials will also get to deal with the mess that is social security and medicare, since our parents largely could not be bothered to do so and yet continued to demand more-and-more.
You’re being so patently ridiculous I can’t believe you’re making this argument in good faith. Market participation in 1960 was vastly lower.
It says a boomer born in the 1960s, not investing in the 1960s. Regardless, the analysis assumes the same savings rate. For millennials to be as well off as the boomers requires additional savings.
Nope it requires savings and investing in equities which very few people in the 1960s did.
Those numbers don’t tell you anything unless you quantify the disposable income of each group. I might take 430% of a higher disposable rather than 850% of a lower disposable income even if the latter is still higher than the former… because it means I will have had a higher disposable income during all those years of saving.
I'm slightly confused by the triple negative.
"you absolutely will never retire or own a home"
"this is not true for most (but true for teachers)"
Teachers earn far more than a 50th percentile income, up to 91st percentile in some jurisdictions.
If on average most can retire or own a home (the rate is in the high 60s), then certainly the average teacher can. Not everywhere, of course.
I don't understand why you think there's a triple negative. Statement: it is impossible to retire or buy a house with money from a job. Negation: this is not true. Parenthetical: except for me, a teacher. This is, to my mind, an incredibly straightforward grammatical construction. You might disagree with any part of it but I'm not following how you found it confusing.
As for the teacher thing, that was a self-deprecating joke, mostly. I teach private school so there's more truth in it than for most, since we don't get a pension, but I do OK
The first is an absence (a negative).
no retirement or house -> not true -> not not for teachers
It's not an explicit grammatical triple negative, but at least a conceptual one*.
I believed it to be false assertion based on various financial data and some properties of averages. Since triple negatives have a high false rate of construction, it was not obvious to this reader whether the triple negative was intended, or the assertion made was intended.
You've now clarified which. Thank you.
*My favourite linguistics prof would have argued that there is no such distinction.
Just think.... if we privatize all education, then hundreds of thousands of decently paid jobs can be eliminated. Now that's a worthy goal.
We pay some fork-lift drivers $200k per year because they're in the right union. Does this make sense?
Yes. Now let’s unionize other jobs so we, too, can make living wages and have protection from psycho managers.
You're probably not kidding ... but displaying a lack of economic experience.
Almost every job in the US is tied to the minimum wage. Even those hundred bucks an hour fork-lift drivers. Every rise in the minimum wage is realized by all workers. Every cowboy, every meat cutter, every truck driver, every burger flipper ... and when they all get a raise, the price of cattle goes up a little bit, the cost of cutting up cattle into hamburger goes up a little bit, the cost to get ground beef to the store goes up a little bit, the cost to flip a burger goes up a little bit more ... and that hamburger costs a little bit more. And it all comes out the same.
California fast food workers earn twenty bucks an hour, and a simple burger in California now costs $15, and no one goes to buy burgers anymore and the restaurants are laying people off.
And this is exactly why the USSR failed, Cuba failed ...
"it's true for me"
It seems as if you're aiming low in life. This is an unfortunate trait I see in many teachers. I do believe teachers—at least at the high school level—should be drafted from the pool of older industry workers. Because it seems to me that far too many students in college with no real career aim decide to 'take the low road.' I've heard more than one college student say this "I'll just take the BA and become a teacher." I think it stems from the student seeing they're not going to pass the math portion, thus can't take the physics, thus can't get the Bachelors of Science degree. Without the BSc. they're not going to get a science job. This is not the path they planned for, but the path they'll have to accept considering the circumstances.
Do these students—ergo new teachers go on to inspire their students? I think not. All of my inspirational teachers came out of industry.
We take the most depressed uninspired graduates and turn them into depressed uninspiring teachers.
Change the formula here. Find another career, a career where people put in long hours because they love their jobs, a career where the boss hands out bonuses, options, and other nice perks to keep the talent. After ten years of this, come back to teaching and be an inspiration.
This is the stupidest thing I've ever read, and I read high school essays. I'm sorry that you equate 'aiming low' with accepting a lower salary, and that you feel contempt for education as a field. Obviously our profession failed you and for that I am sorry, but I assure you there are others who benefit.
Just here to back up Liam! We need good teachers.
Many or most financial scams are based on exploiting the same mindset. Someone who believes that a way for them to get rich quick must exist is going to be gullible when someone offers one. That's why there are so many repeat victims; so long as they continue to think that way, they can be exploited again and again and again.
Reading about Softbank and other investors like them, it's hard not to see the similarity. In a weird way, you could say it's AI; the artificial pseudo-mind of the corporate entity is displaying the same pathologies as a flesh-and-blood person. But maybe that perspective does too much to obscure the individual failings of the people running those organizations.
I think this is exactly correct, and also extremely frustrating. Particularly because it's one of those very common situations wherein gullibility and exuberance can be highly rewarded, while prescience is worthless, since, as they say, the market can remain irrational much longer than you can stay solvent. The thing I really just don't get is why anyone finds LLM type AI so exciting - what could be more dystopian than outsourcing human creativity to a machine. Especially one that, to my mind, unfairly appropriates the products of human creativity and makes it all the property of the tech oligarch class.
from the perspective of the history of AI it’s a miracle. they’re doing stuff that seemed impossible ten years ago, and there’s one system doing it across like 5 different areas of AI. it’s like someone found alien technology from outer space.
if you put ChatGPT in a sci fi novel in 2005, people would have mocked you for bad world building and not understanding technology.
the uses to which this alien technology is put is increasingly sordid and depressing, it’s true, and the economic value is doubtful.
I'm sure AI will fit in somewhere but I see the election being contested and some nations on the global scene to pick the moment the US is counting chads to go ahead with WW3. By the time the US figures out the election it'll be split into two ready to start a Civil War with each side choosing a different side in the World War to fight on.
You're right and you're wrong. YES, AI is impossibly overhyped, and generalized intelligence is vastly harder than most people think. I'm a daily user of ChatGPT both for general fact-finding and specifically for software development, and I'm continually frustrated by the "hallucinations". It turns out that AI is optimized to be persuasive, not accurate -- it's extremely good at generating answers that _sound_ right, but aren't necessarily true. (Much like junior programmers.) So, no, it's not going to put all the software developers out of jobs.
On the other hand . . . I spent most of my 20+ year career searching on Google for technical information, and now I default to using ChatGPT instead of Google for my first query. I use it every day. Every single developer I know uses some form of AI in both research and direct code generation. (They complain about its quality, but they still use it.) I can't remember the last time a single technology got such huge user adoption so fast. Oh, wait, I remember now . . . it was Google Search. So, yeah, AI is a pretty big deal, and a potentially Google-sized one.
Yeah, my impression is the same as yours. But what you left out is how quickly it is improving. If we think we're still in the steep part of the S-curve it is hard to know its value in the future. Kind of like the internet, yeah for sure there was a bubble in 2000, but it turned out to be correct, in the sense that something really big was coming. It's hard to predict the future. Which is what I'd title this piece.
ChatGPT as a google replacement simply reminds me of just how shitty Google (and search in general) has become. Every time I have to go to google because GPT can't provide reasonable sources for its answers I hate my life.
I've gotten very irritated with Google search. All they want to do is sell me something. I avoid anything that's Sponsored, though occasionally that's where I need to go.
Well, ChatGPT and other AI services also need to figure out a way to make money and I wouldn't count out targeted advertising that is much more insidious!
It would be the most shocking development in history if another Google did NOT come, at some point. New corporate giants always arise somewhere, sometime. But what will that company be involved in? That's the real question, and it certainly may have nothing to do with AI.
Any number of solar focused companies could become enormous giants in this century as we turn toward that energy source. It's on an exponential growth curve as we speak, and that's where I'd put my money if I had it to give. And if solar, or some other type of energy generation, get's cheap enough, an efficient carbon capture company could also take that niche as climate change gets worse and worse and government's begin to invest in earnest.
Slow and steady growth IS exponential growth. It’s just a slower timescale.
Big Tech has two or three years before they have to start writing off ~$200B of AI servers. That's how long they have to find a sustainable end user market.
ChatGPT has gone from kindergarten level to elementary schools to high school to college level work in a few years and you think that has no future? Seems unlikely.
It doesn't matter how impressive the tech is if it doesn't make money. For now, there aren't enough use cases and end users willing to pay the kind of money that would justify the investments currently required to build and sustain this tech. The factors that make it so expensive, like GPUs and power constraints, aren't going to be resolved in the next few years.
False - ChatGPT’s revenue is doubling every quarter. There certainly do appear to be more than enough entities willing to pay.
They are the "manufacturer" in this chain. If their "customers" (e.g., Microsoft) don't find they can make money with the product they are buying, the sales will slow down quickly. I mean, I pay $20 per month for ChatGPT, and do so happily. I'd have paid $20 a month for a Google that didn't work like total shit and just gave me web sites that are fucking relevant to my search too, but that isn't a option as far as I know.
(I'm expecting that, in less than 20 years, I'll be swimming through advertising diarrhea in ChatGPT as well, or some other enshittification that results from margin squeeze.)
> I'd have paid $20 a month for a Google that didn't work like total shit and just gave me web sites that are fucking relevant to my search too, but that isn't a option as far as I know.
Check out Kagi.
I generally agree with the premise that AI is probably overhyped.
However, my intuition tells me that there's some misunderstanding of who benefits most from interest rates and how actual VC companies funding startups work. Bear in mind, I'm no expert on this and haven't reviewed the data (mostly because I'm not sure where I'd look to find the right data).
First, VC companies are not looking for Google or Facebook (though I'm sure they'd love to find that). They typically fund a startup with a relative pittance, and then get out when they can make 10x or 100x their money. So if they invest $10 million, if they get out when that business is worth $100 million or $1 billion, that's a huge win for them. There are many, many, many companies that reach those milestones, and enough of them do so quickly enough to be worth the investment and keep the VC firm profitable even with failures. There's also the simple fact that it's not just "either the startup goes out of business, or it's x10 or x100. In many cases, it may simply be a small gain or a small loss.
Second, I suspect VC firms rely less on borrowed money (though I'm sure they take advantage of the near-zero interest rates when they are available), so I think interest rates are not some massive boon to VC (except insofar as the companies they invest in can also afford to borrow a lot, making it easier to invest).
I suspect the companies that have *really* benefited most from low interest rates are private equity firms: firms that make a living buying up companies, "growing" them (or merely taking loans against them to cash out), then reselling them again. These guys thrive on low interest rates; it protects them against mistakes, and ensures they can almost always get SOME kind of payout, even if it's only a matter of taking a loan out against the owned company's balance sheets, pocketing the money, and then selling the company for a fairly minor gain.
One phenomenon that I find fascinating is how the future differs from the predictions, how the experts can get it so right and so wrong.
When the Dot.Com bubble was in full swing, lots of people thought EBay and Boo and pets.com were the future of business. Amazon did happen. But nobody was talking about business process outsourcing.
Yep. Pets.com is my favorite goto when talking about that era. For me the tech bubble was not the same as something like the Tulip bubble. The latter was actually a bubble, the former was correct in predicting the magnitude, but as you mentioned, it was hard to know the exact way it would evolve. Which to me makes perfect sense.
Yep. The dotcom bubble wasn't *wrong*, it was just premature. The necessary infrastructure for online commerce, it turned out, was smartphones.
It really was a bubble, but definitely not in the tulip sense. Being able to secure millions in funding (and IPOs!) when not even having a product was absolutely a bubble. It's simply that the bubble was driven by actual potential causing a lot of fear of missing out on the growth of a huge new sector of the market.
This ties into Freddie’s observation that he’s not a big fan of ambition. And the next big thing is going to be built on megalomaniacal levels of ambition and Freddie wants no part of it.
My first thought when I started this piece was about Nvidia. NVDA was brought up as some sort of outlier but their growth started well after Google's and they are now bigger than Google. I don't know, but I think that is the perfect answer to who says there will be another Google, it's NVDA. This should have been titled: "Who says there will be another Nvidia."
"I mean, look, Aramco and Exxon and Chevron etc. remain huge firms despite being the opposite of sexy, right? The oil and gas business is a really good one to be in. Big profits, huge market caps. But nobody is basing their whole investment strategy on the idea that there absolutely has to be some hot new oil company startup that definitely will emerge. Why would anyone think that?"
Oil, qua oil, is played out. Energy, however, is not. And we see this in all of the scratching about for new sources of it. We see solar startups, wave tech start ups, and so on, whether they work or not as a viable way forward. But, we also see that crippled by various factions in the gov't.
Now, imagine a company that came up with realistic, workable nuclear power sources that are basically the size of a railroad boxcar. How quickly do you think that would draw investors? I would guess you would get your hockey stick right there. Now, as nuclear development has been curtailed by a massive regulatory environment, any investors would be, quite correctly, shy of dumping the needed cash into that idea to both make it work get in on that hockey stick.
For what it's worth, I have a read a LOT more articles about AI skepticism in major publications the last couple of months. At a certain point, the facts will be the facts, and there is no way the investments can be justified without the returns.
Here is one example: https://www.nytimes.com/2024/09/23/technology/ai-jim-covello-goldman-sachs.html
Good article. Thanks.
I'm concerned about the huge energy outlays. Shall we dump that much more CO2 into the atmosphere for what? Some of the scientific and technology research yes, but new ways to scam the public and generate sales...I don't think so.